Berlin vs. Rome: A Tale of Two Visions

by Simon Nixon

Wall Street Journal
September 30, 2012

For weeks, the eyes of the world have been on Spain. Ever since the European Central Bank announced its Outright Market Transactions program, Madrid has kept the markets guessing over whether it will request aid from the euro zone's bailout funds, paving the way for the ECB to start buying its bonds. The market suspects an ill-tempered standoff between a stubborn Spanish government and its euro-zone partners. Anxiety last week spilled over into the market with Spanish bond yields rising sharply and stock markets selling off. But the reality is more complex. At the heart of the Spanish impasse lies a wider political dispute that goes to the heart of the euro crisis—and the main protagonists in this debate are Germany and Italy. How this disagreement is resolved will shape the future of the single currency.

From Berlin's perspective, the answer is clear: The German government believes the OMT should only be a last resort; Spain should avoid asking for ECB support unless it becomes absolutely necessary. That's partly because Berlin would have to submit any Spanish request for aid to a potentially troublesome vote of the Bundestag; it is also because any government bond-buying by the ECB will further antagonize the Bundesbank, fanning German opposition to the OMT; and partly because Berlin fears that no sooner does Spain request aid than the market will turn its attention to other countries including Italy, fueling the sense of crisis in the euro zone. If ECB support for Spain does become necessary, strict conditions will be required to ease the domestic political pressure on Berlin.

But viewed through Italian eyes, the situation looks very different.

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Welcome back to the eurozone crisis

by Wolfgang Münchau

Financial Times
September 30, 2012

Have you noticed that the half-life of eurozone optimism is getting shorter? It was only three weeks ago that Mario Draghi, the European Central Bank president, announced his outright monetary transactions, a programme of sovereign bond purchases with no upfront limit. It seemed that the consensus was that this had either ended the crisis, or its acute phase.

Last week investors – and Spanish journalists – suddenly discovered to their horror that Germany will not after all allow Spain to dump the risk of its banks on to the European Stability Mechanism, the eurozone rescue fund. That seems to contradict the June 29 eurozone leaders’ summit statement, which said it was “imperative to break the vicious circle between banks and sovereigns”. EU leaders reached this agreement in the early hours of the morning after a diplomatic ambush by the Italian and Spanish prime ministers. Whatever may have been agreed that morning, it was understood differently in Spain than in Germany. The Spanish interpretation had been that the EU would adopt a banking union by the beginning of next year. This would then automatically trigger a shift in the burden of the recapitalisation of the Spanish banking sector from Spain to the ESM.

This is not how Angela Merkel, the German chancellor, and Wolfgang Schäuble, her finance minister, understood the deal at all. Over the past few days, they clarified what kind of banking union they want. This is how I would summarise the German position:

First, we do not really want a banking union all, but if we have to have it, we would like to limit the remit of the pan-European supervisor to a few large cross-border banks.

Second, ideally the supervisor should not be the ECB; if it has to be the ECB, there must be safeguards, stronger than those proposed, to ensure that monetary policy remains independent from the banking supervisor.

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Το έλλειμμα ανταγωνισμού στην αγορά

του Πάσχου Μανδραβέλη

Καθημερινή
30 Σεπτεμβρίου 2012

Το πιθανότερο είναι πως όταν ήρθε η τρόικα στην Ελλάδα φανταζόταν ότι έχει να κάνει με μια δυτικού τύπου οικονομία, που απλώς το είχε ρίξει έξω δημοσιονομικά, εκμεταλλευόμενη τα φθηνά επιτόκια που εξασφάλισε η ένταξη στην ΟΝΕ. Σίγουρα δεν μπορούσε να δει τον πλούτο των «σχέσεων» που είχαν αναπτυχθεί υπογείως και απομυζούσαν ένα μεγάλο κομμάτι του εθνικού μας πλούτου. Λογικό: οι σχέσεις αυτές είναι θαμμένες σε μια ζούγκλα νόμων και διατάξεων, έτσι ώστε να χρειάζεται ολόκληρη μελέτη που να αποκαλύπτει γιατί τα ελληνικά προϊόντα και οι ελληνικές υπηρεσίες είναι ακριβότερα στην Ελλάδα απ’ ό,τι στο εξωτερικό.

Μπορεί μάλιστα να περίμεναν ότι μειώνοντας τα εισοδήματα θα έπεφταν και οι τιμές· έτσι γίνεται σε όλο τον κόσμο, αυτό λέει και η οικονομική λογική. Αμ, δε! Σε μια χώρα που έχουν καταστρατηγηθεί όλοι οι νόμοι, θα την γλίτωνε ο νόμος της προσφοράς και της ζήτησης; Υπάρχουν, απίθανες -και συνήθως μεταμεσονύκτιες- διατάξεις που φτιάχνονται επίτηδες με στρυφνούς νομικούς όρους και παραπομπές σε παλαιότερους νόμους, έτσι ώστε νόμιμα να εξυπηρετούνται πελατειακά συμφέροντα. Και τα πελατειακά συμφέροντα του πολιτικού συστήματος δεν είναι μόνο οι δημόσιοι υπάλληλοι ή οι ταξιτζήδες. Είναι και οι επιχειρήσεις που διά νόμων λυμαίνονται μονοπωλιακά ή ολιγοπωλιακά κάποιες αγορές, απολαμβάνοντας υψηλά κέρδη. Οπως για παράδειγμα στην αγορά πετρελαιοειδών. Σύμφωνα με σχέδιο μελέτης του ΔΝΤ, που αποκάλυψε η Wall Street Journal (22.9.2012), «τα περιθώρια κέρδους στα πετρελαιοειδή είναι από τα υψηλότερα στην Ευρώπη και στην περίπτωση του πετρελαίου θέρμανσης, διπλάσια από τον μέσο όρο της Ε.Ε.».

Σύμφωνα με το ίδιο δημοσίευμα «το έλλειμμα ανταγωνισμού στα διυλιστήρια κοστίζει στους καταναλωτές πάνω από ένα δισ. δολάρια τον χρόνο... Παρά τα πέντε χρόνια ύφεσης, υψηλότατης ανεργίας, και απανωτές προσπάθειες να ανοίξει η υπερβολικά ρυθμισμένη οικονομία, οι τιμές στην Ελλάδα παραμένουν σταθερά υψηλές, κάτι που αποτελεί εμπόδιο στην ανάκτηση της ανταγωνιστικότητας και της ανάπτυξης. Σύμφωνα με το ΔΝΤ και άλλους αναλυτές, αυτό είναι αποτέλεσμα ενός συνδυασμού επιχειρήσεων που κυριαρχούν στην αγορά και υπερβολικής ρύθμισης που καταπνίγει τον ανταγωνισμό».

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Quo vadis Graecia?

του Κώστα Αζαριάδη

Καθημερινή
30 Σεπτεμβρίου 2012

Πού πας Ελλάδα; Από το 2008 το ερώτημα απασχολεί ηγέτες υπερδυνάμεων, αγχώνει ευρωκράτες των Βρυξελλών και φοβίζει το πανελλήνιο. Εύλογη η ανησυχία καθώς η εθνική οικονομία βρίσκεται σε ελεύθερη πτώση: εισοδήματα πεσμένα 20%, επενδύσεις στο μισό, η ανεργία στα ύψη. Εντεκα εκατομμύρια πολίτες εξαρτώνται οικονομικά από δυόμισι εκατομμύρια θέσεις εργασίας ενός ιδιωτικού τομέα που παραπαίει.

Στο ζοφερό αυτό τοπίο, πολλοί ζουν με την ελπίδα της αυτόματης ανάκαμψης. Ευελπιστούν πως τα χειρότερα πέρασαν και η εθνική οικονομία, αργά ή γρήγορα, θα βελτιωθεί αυτοβούλως και θα αναπληρώσει τις απώλειες της τελευταίας πενταετίας. Εκεί ποντάρει η πολιτική ηγεσία της χώρας, που έχει στρέψει όλη την προσοχή της στην ανεύρεση φόρων και δανείων για να πληρωθούν μισθοί και συντάξεις του επόμενου μήνα. Εκεί ποντάρουν οι συντεχνίες που αγωνίζονται πεισματικά, και μέχρι στιγμής αποτελεσματικά, να προστατέψουν τα κεκτημένα τους. Σ’ αυτό φαίνεται να ελπίζουν και μεγάλα στρώματα, αν όχι η πλειονότητα, του ελληνικού λαού που ευαγγελίζονται μια γρήγορη «πολιτική» λύση των προβλημάτων τους χωρίς την μακρόπνοη λιτότητα που απαιτούν από τη χώρα τα Μνημόνια και μακριά από τις ριζικές μεταρρυθμίσεις που συνιστούν, σχεδόν ομόφωνα, οι «τεχνοκράτες».

Επίκειται λοιπόν κάποια, έστω και αργή, αναστροφή της οικονομίας από τον επόμενο χρόνο προς την προ του 2008 κατάσταση; Ή μήπως είναι η βαθιά κρίση το πρώτο στάδιο μονιμότερης στροφής από τον πλούτο των αμέσως προηγούμενων δεκαετιών στην ιστορική φτώχεια των Βαλκανίων; Είναι το μέλλον της χώρας παρόμοιο με της Ιταλίας ή με της Αλβανίας; Θα επιστρέψουν οι χαμηλόμισθοι και συνταξιούχοι στα χίλια ευρώ τον μήνα ή θα κατρακυλήσουν οι αμοιβές στα διακόσια με τριακόσια που έπαιρναν οι παππούδες τους πριν από πενήντα χρόνια;

Η οικονομική επιστήμη περιγράφει σαφέστατα τη συνταγή της επιτυχημένης ανάπτυξης, της οποίας η ουσία συνοψίζεται στο γνωστό τρίπτυχο του Σκώτου φιλόσοφου Αδάμ Σμιθ, «ειρήνη, χαμηλοί φόροι, ανεκτή εφαρμογή των νόμων». Η συνταγή αυτή εφαρμόσθηκε κατά γράμμα σε όλες τις αναπτυγμένες χώρες του κόσμου. Σήμερα δοκιμάζεται, με κάποιες ατέλειες και αρκετή επιτυχία, από τρεις γείτονες· Βουλγαρία, Ρουμανία, Τουρκία.

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Five looming dangers that could tear the eurozone apart

by Heather Stewart

Observer
September 30, 2012

[...]

Greece

Rumour has it in Brussels that eurozone politicians have sworn not to push Greece out until after Barack Obama is safely back in the White House. But few analysts believe it has a long-term future in the single currency.

After fraught negotiations that stretched on all summer, the coalition government, led by Antonis Samaras, appeared last week to have reached agreement on a new package of cuts, which it hopes will satisfy the demands of the troika.

But Greece's economy remains in a wrenching recession, and it looks likely they will continue to miss the goals set by international lenders, even if the next €31bn (£24.7bn) disbursement from its bailout fund is released. Eventually, Greece's partners may decide to let it go – especially if they believe they have elected a solid firewall that would prevent a "Grexit", as it's known, creating a devastating chain reaction in financial markets.

And Greece could yet decide to leave of its own accord, if domestic political pressure becomes too intense. With Samaras elected on a promise he would exact concessions from the country's creditors, the political reaction to a fresh round of cuts from a population already scarred by the downturn is likely to be furious. Protesters threw Molotov cocktails at riot police at a protest during last week's general strike, the latest of many as the workforce has endured cuts in benefits, wages, pensions and public services to meet the troika's deficit targets.

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Greek Premier Sees Hope, but Only if Europe Helps

New York Times
September 29, 2012

He waited his whole life for this moment, and many European leaders see him as Greece’s last best hope for stability. But for Antonis Samaras, leading his country is no fun at all. “Do you think anyone can be happy being prime minister of Greece?” he asked in a low voice in an interview here on Friday, placing his elbows on his knees. “This is the toughest job in the world. It’s just pain.”

Since coming to power in June after two tumultuous elections, Mr. Samaras has been laboring to restore Greece’s credibility and to dispel all fears that the country could leave the euro, even as the harsh austerity he must impose to keep the country in the common currency stokes a new wave of social unrest.

Sitting in his office at the Maximos Mansion here, he all but declared that he had achieved that goal. “There is absolutely zero risk that Greece is leaving the euro,” he said. But he implied that the conditions for euro membership came at a rising political and economic cost.

On a week when violent protests broke out in Greece and Spain against tighter austerity measures and surging unemployment, and after other mass demonstrations in normally tranquil Portugal, Mr. Samaras warned the international community to pay close attention to “this new social phenomenon” sweeping Europe.

“This is the product of this huge crisis and this huge recession we’re in,” he said. “So that should ring a bell to our allies and to the Western world: that if this happens in Greece and in Spain and tomorrow in other countries, that they should make sure this will not intensify.”

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External Imbalances in the Euro Area

by Gian Milesi-Ferretti and Thierry Tressel

International Monetary Fund
Working Paper No. 12/236
September 28, 2012

The paper examines the extent to which current account imbalances of euro area countries are related to intra-euro area factors and to external trade shocks. We argue that the traditional explanations for the rising imbalances are correct, but are incomplete. We uncover a large impact of declines in export competitiveness and asymmetric trade developments vis-à-vis the rest of the world –in particular vis-à-vis China, Central and Eastern Europe, and oil exporters—on the external balance of euro area debtor countries. While current account imbalances of euro area deficit countries vis-à-vis the rest of the world increased, they were financed mostly by intra-euro area capital inflows (in particular by the purchase of government and financial institutions’ securities, and cross-border interbank lending) which permitted external imbalances to grow over time.

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New Study Blames Greek Debt Crisis on Market’s Invisible Herd

by Brandon Keim

Wired Science
September 28, 2012

A new analysis of the Greek debt crisis claims to have quantified what many people intuitively believed: That a spike in debt prices in 2011 didn’t reflect a rational market appraisal of the country’s economy, but a panic that worsened an already dire situation.

It’s still a preliminary analysis, and not something on which policy should be based, but the underlying premise is intriguing. Perhaps it’s possible to determine precisely when markets tip from equilibrium, a state in which prices reflect supply and demand, into irrationality.

“It’s not enough to have a sense that they might not be in equilibrium,” said Yaneer Bar-Yam, president of the New England Complex Systems Institute and co-author of the new analysis, released Sept. 27 by NECSI. “You have to be able to quantify it. That’s what we’re after.”

Over five months following the summer of 2011, the value of Greek bonds — financial instruments predicated on Greece’s ability to repay its loans — plummeted from 57 percent to 21 percent of face value, signaling a crisis of confidence among banks and investors. The market had spoken, driving up interest rates on existing loans, making it harder for Greece to borrow more money, and increasing the likelihood of Greece defaulting altogether on its debt.

Unresolved was the extent to which the bond market’s precipitously low valuation of Greek bonds actually reflected the country’s underlying problems, its decades of political misrule and culture of tax evasion, and how much was a self-perpetuating, self-fulfilling panic.

“You look at the decline and say, ‘This just doesn’t make any sense!’ The economic conditions in Greece didn’t change that much. If the market’s evaluation of the probability of default in August was 1 in 3, how can it become 4 in 5 just five months later?” said Bar-Yam. “What do you do to scientifically disentangle this?”

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Europe’s Trial by Crisis

by Joschka Fischer

Project Syndicate
September 28, 2012

Some 2,500 years ago, the ancient Greek philosopher Heraclitus concluded that war is the father of all things. He might have added that crisis is their mother.

Fortunately, war between world powers is no longer a realistic option, owing to the threat of mutual nuclear destruction. But major international crises, such as the current global financial crisis, remain with us – which might not be an entirely bad thing.

Just as in war, crises fundamentally disrupt the status quo, which means that they create an opportunity – without war’s destructive force – for change that in normal times is hardly possible. To overcome a crisis requires doing things that previously were barely conceivable, let alone feasible.

That is what has happened to the European Union over the last three years, because the global financial crisis has not only shaken Europe to its foundations; it has assumed life-threatening proportions.

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Μόνη λύση η ομοσπονδία

του Π.Κ. Ιωακειμίδη

Τα Νέα
28 Σεπτεμβρίου 2012

Αποτελεί η ομοσπονδία την απάντηση στο πρόβλημα της Ευρώπης; Τους τελευταίους μήνες ολοένα και πυκνώνουν οι φωνές υπέρ της ομοσπονδιοποίησης της Ευρωπαϊκής Ενωσης ως ριζική απάντηση στην κρίση, και ως πρόκληση για βαθύτερη ενοποίηση. Ο πρόεδρος της Ευρωπαϊκής Επιτροπής Ζ. Μ. Μπαρόζο επίσημα διακήρυξε στο Ευρωπαϊκό Κοινοβούλιο πριν λίγες μέρες ότι η Ενωση θα πρέπει να μετεξελιχθεί σε «ομοσπονδία εθνικών κρατών», ιδέα που αρχικά είχε διατυπώσει ο Ζακ Ντελόρ. Οι ηγετικές μορφές του Ευρωπαϊκού Κοινοβουλίου Γκι Βέρχοφστατ και Ντανιέλ Κον-Μπεντίτ, σε κοινό κείμενό τους, προτείνουν επίσης την ομοσπονδιοποίηση της Ευρώπης μέσω της κατάρτισης ενός νέου Συντάγματος. Η πλειοψηφία επίσης του Ευρωκοινοβουλίου υποστηρίζει σταθερά την ομοσπονδιοποίηση. Αλλά το σημαντικότερο είναι ότι η Γερμανία επανέφερε στην ατζέντα της ευρωπαϊκής ενοποίησης τον στόχο της ευρωπαϊκής ομοσπονδίας, ενώ μια ομάδα έντεκα κρατών - μελών (ανάμεσά τους η Γαλλία και η Πολωνία), σε κοινό κείμενο που επεξεργάστηκαν οι υπουργοί Εξωτερικών, προτείνουν δέσμη μεταρρυθμίσεων που ουσιαστικά οδηγούν σε ομοσπονδιακή Ευρώπη. Αλλά και πολλοί αναλυτές εκτιμούν ότι τελικά η Ενωση και ειδικότερα η ευρωζώνη ή θα ομοσπονδιοποιηθεί ή θα οδηγηθεί σε διάλυση. Ετσι, έπειτα από αρκετά χρόνια στη διάρκεια των οποίων ο όρος ομοσπονδία ήταν η απαγορευμένη λέξη στην ευρωπαϊκή ατζέντα, η συζήτηση ξανανοίγει. Και ανοίγει σε μια περίοδο δεινής κρίσης για τη διαδικασία της ευρωπαϊκής ενοποίησης.

Αποτελεί όμως η ομοσπονδία τη λύση και είναι εφικτή η προώθησή της; Πρώτα απ' όλα πρέπει να σημειωθεί ότι η ομοσπονδία είναι σύνθετο και περίπλοκο σύστημα που στο πλαίσιο της Ενωσης ελάχιστες χώρες μέλη γνωρίζουν εμπειρικά τη λειτουργία του (πρωτίστως η Γερμανία και ακολουθούν η Αυστρία και το Βέλγιο). Γι' αυτό και υπάρχουν διαμετρικά αντίθετες εκτιμήσεις για τη σημασία και τις συνέπειές του. Για ορισμένες χώρες (π.χ. Γερμανία, Βέλγιο κ.ά.) το ομοσπονδιακό σύστημα σημαίνει αποκέντρωση εξουσιών, για κάποιες άλλες όμως (όπως π.χ. Ην. Βασίλειο) σημαίνει ακριβώς το αντίθετο - συγκέντρωση εξουσιών και κυριαρχίας σε ένα κέντρο, τις Βρυξέλλες. Και οι δύο εκτιμήσεις είναι κατά κάποιο τρόπο σωστές. Η ομοσπονδία οικοδομείται με την εκχώρηση όντως εξουσιών και κυριαρχίας σ' ένα πολιτικό κέντρο, είτε αυτό λέγεται Ουάσιγκτον, Βερολίνο ή Βρυξέλλες, αλλά από την άλλη μεριά ένα άλλο σημαντικό μέρος εξουσιών και κυριαρχίας παραμένει στα «συνιστώντα μέλη» της ομοσπονδίας που στην περίπτωση της Ευρωπαϊκής Ενωσης είναι τα εθνικά κράτη - μέλη της.

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EU Countries Grow Further Apart

by Matina Stevis

Wall Street Journal
September 28, 2012

Life and work in the European Union is coming to mean increasingly different things to its 500 million citizens, depending on where they live, with divergence in unemployment rates, child poverty, hours worked and household disposal income widening.

In its quarterly review of employment and social conditions, a deeper overview of various previously released indicators published today, the European Commission found that already-evident social divergences within the EU have continued to widen.

A prime example is unemployment: The report says that the gap between the country reporting the lowest rate–Austria, at 4.5%– and that reporting the highest rate–Spain at 25.1%– is at an all-time high of 20.6 percentage points.

Just three member states are now reporting youth-unemployment rates below 10%: Germany, Austria and the Netherlands. More than 30% of Slovakian, Portuguese, Italian and Irish youths are out of work. But for young Spaniards and Greeks, prospects are even worse, with more than half of them jobless in each country.

A mere three member states are now reporting youth-unemployment rates below 10% — Germany, Austria and the Netherlands. More than 30% of Slovakian, Portuguese, Italian and Irish youths are out of work. But for young Spaniards and Greeks, prospects are still worse, with more than half jobless in each country. (The youth unemployment rate refers to young people who are not in education or training and are therefore part of the workforce, not to the entire population aged between 16 and 24.)

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Europe needs to look at sharing more of Greece’s pain

by Mohamed El-Erian

Financial Times
September 28, 2012

If you want to cause major discomfort at a meeting of European policymakers, just try mentioning “OSI”, or official sector involvement. The notion that official creditors, and by that I mean governments and regional/multilateral institutions, may need to accept a reduction in their contractual claims on Greece is anathema to many. Yet the issue will surface repeatedly, and more frequently, given the current overly-constrained approach to solving Greece’s deep problems.

Official creditors have good reasons to resist OSI. Their sizeable lending to Greece was not a commercially-based decision but rather an emergency intervention. The aim was both to stabilise Greece and to limit destabilising spillover for other European economies.

They came in at a time when private creditors were exiting Greece en masse, and in a highly disorderly fashion. Their financing was extended at concessional interest rates. Loan maturities extended well beyond what a private creditor would envisage. And, when push came to shove, the official sector provided even more funding to Greece so that the country could meet its debt-servicing obligations.

None of this would have occurred if the official sector did not think of itself as a “preferred creditor”. That is what a lender of last resort reasonably expects, especially when it is stepping in to counter a disorderly financing implosion (and thus limit the losses to be incurred by private creditors). And it is what many parliaments in creditor countries believe as they encumber domestic tax receipts with actual or contingent Greek liabilities.

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«Παραμάγαζα» προς πώληση!

του Δημήτρη Μάρδα

Protagon.gr
28 Σεπτεμβρίου 2012

Κομματικό στέλεχος και στενός συνεργάτης βαρόνου της πολιτικής, έχοντας ένα απλό πτυχίο νομικής και κάποιο μεταπτυχιακό δίπλωμα, χωρίς την παραμικρή τριβή με την αγορά, διοικεί εδώ και χρόνια όποιον φορέα του αναθέτει ο πολιτικός του ινστρούχτορας. Κρατικοδίαιτος, χωρίς τις απαραίτητες δεξιότητες, ζει και αναπνέει, από την αρχή της επαγγελματικής του καριέρας, υπό την ομπρέλα του κόμματος.

Έτσι, κάποτε θεωρήθηκε ειδικός σε θέματα αγοράς, οπότε ανέλαβε νευραλγικά πόστα στο χώρο του εμπορίου. Κατά την επόμενη θητεία του, ως πάλι ειδικός σε θέματα επικοινωνίας συμμετείχε στη διοίκηση ενός δημόσιου ραδιοτηλεοπτικού μέσου. Τέλος ως ειδικός εκ νέου σε θέματα θαλασσίων μεταφορών, ανέλαβε την διοίκηση ενός μεγάλου λιμανιού της χώρας.

Όσον αφορά στους καθ’ ύλην αρμοδίους επιστήμονες, τους ανθρώπους τις πιάτσας που έλιωσαν στα θρανία και «ψήθηκαν» στην αγορά αυτοί περιττεύουν… Δεν θεωρούνται από τους πεφωτισμένους ηγέτες μας ως οι καταλληλότεροι να διοικήσουν μια ΔΕΚΟ, το αντικείμενο της οποίας κατέχουν καλά!

Και το παράδειγμα που δόθηκε δεν είναι το μόνο! Μετά απορούν πολλοί γιατί οι ΔΕΚΟ βρίσκονται σε αυτό το χάλι και γιατί θα πουληθούν «κοψοχρονιάς»!

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Greece Seeks Taxes From Wealthy With Cash Havens in London

New York Times
September 27, 2012

The London real estate market was abuzz. A wealthy Greek banker wanted to spend up to £60 million (nearly $100 million) for a home, and was in a hurry to make a deal.

Real estate agents recall sifting the listings for some of the most prestigious, and expensive, properties in South Kensington, a favored area for London’s international set.

But the house hunter, Lavrentis Lavrentiadis, never made a purchase in the spring of 2011, agents say. Within months his failing institution, a small lender known as Proton Bank, was seized. The Greek government, suspecting that Mr. Lavrentiadis may have moved money out of the country, is now investigating his activities to determine whether he engaged in fraud and money laundering.

Greece, heavily in debt and desperate to track down money wherever it can, is leaving no stone unturned.

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Data Points to Further Gloom in Euro Zone

New York Times
September 27, 2012

The outlook for the euro zone remained unsettled Thursday, as data showed that confidence among European businesses and consumers continued to fall in September.

The European Commission reported that its economic sentiment indicator for the 17 European Union members that use the euro fell by 1.1 points, to 85.0, the seventh consecutive month of decline.

For the 27-member European Union, confidence fell by 0.9 points in September, to 86.1. An indicator of more than 100 shows more confidence than not about the economy in five sectors surveyed.

The commission attributed the weakening to declining confidence in the services, retailing, industrial and consumer sectors. It cited increased optimism in the fifth sector, construction, as a promising sign.

The data is “another warning that the euro zone economy is sinking further into recession,” Jonathan Loynes, chief European economist at Capital Economics, wrote in an analysis, adding that the results dashed hopes that the European Central Bank’s pledge on Sept. 6 “to take more decisive policy action might have improved sentiment towards the broader economy.”

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Europe’s Austerity Madness

by Paul Krugman

New York Times
September 27, 2012

So much for complacency. Just a few days ago, the conventional wisdom was that Europe finally had things under control. The European Central Bank, by promising to buy the bonds of troubled governments if necessary, had soothed markets. All that debtor nations had to do, the story went, was agree to more and deeper austerity — the condition for central bank loans — and all would be well.

But the purveyors of conventional wisdom forgot that people were involved. Suddenly, Spain and Greece are being racked by strikes and huge demonstrations. The public in these countries is, in effect, saying that it has reached its limit: With unemployment at Great Depression levels and with erstwhile middle-class workers reduced to picking through garbage in search of food, austerity has already gone too far. And this means that there may not be a deal after all.

Much commentary suggests that the citizens of Spain and Greece are just delaying the inevitable, protesting against sacrifices that must, in fact, be made. But the truth is that the protesters are right. More austerity serves no useful purpose; the truly irrational players here are the allegedly serious politicians and officials demanding ever more pain.

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Seeking Aid, Greek Coalition Partners Strike Deal

Wall Street Journal
September 27, 2012

Greece's coalition partners reached a deal on a multibillion-euro austerity plan demanded by creditors, but must jump through several more hoops in the weeks ahead before the country can hope to see any of the cash promised by its European and international partners.

The government must now win approval from creditors and a fragmented Parliament, while facing public protests against the €13.5 billion ($17.4 billion) package, which was settled on Thursday after a last-minute decision to pare back spending cuts and introduce tax measures to plug a €1 billion gap.

Among those who are likely to oppose the austerity plan in the weeks ahead will be Greece's army of self-employed—doctors, lawyers, electricians, plumbers—who have been targeted by the new tax measures.

In an effort to stamp out widespread tax evasion among the self-employed, the government has abolished the tax-free threshold they enjoyed and will now tax them at a 30% rate on all of their income.

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A liberal case for scepticism of the EU

by Samuel Brittan

Financial Times
September 27, 2012

Since anything that can be misunderstood will be misunderstood, I must start with some disclaimers. I am not urging the EU should end. Like the Holy Roman Empire, it may spend many years in gentle decline doing little good and little harm. Nor am I urging that the UK or any other member state should leave the EU. What I am saying is that the EU no longer deserves the devotion of practical idealists. When voices in Paris or Berlin say the answer to any problem is “more Europe”, by which they mean more centralised power to EU institutions, we should turn a deaf ear. And when some leaders say that “without the euro there is no Europe” we should shrug our shoulders and look at an atlas to reassure ourselves.

Although there was always a strong federalist element in the background, the post-1945 European movement began in earnest with the Schuman Plan, designed to integrate German and French coal and steel industries so that war between the two countries would be impossible. There followed the common market, designed to free up trade in western Europe; and I can remember urging Harold Macmillan, the British prime minister, to get on with his application to join. But as time went on, the EU, as it became, acquired more and more ambitions and a whole cadre of eurocrats developed, concerned with increasing EU power and influence for its own sake. At this point they lost me.

In recent economic policy it has achieved the worst of both worlds. It has constructed a network of regulation and red tape, of which business rightly complains. But it has combined this with highly restrictive macroeconomic policies, suggesting that the Bourbons in charge have learnt nothing and forgotten nothing from the catastrophic experiences of the 1930s.

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Greek 'Official Sector Involvement' And European Sovereign Debt Write-Down Alert

by George Kesarios

Seeking Alpha
September 27, 2012

When the Greek problem became apparent around 2010, it was already too late. Spreads were already rising for some time and worries about the Greek economy were already a daily topic of conversation as early as 2008. For some odd reason however, everybody thought nothing would happen, because until that time, nothing indeed had happened.

So when the markets asked a very high yield from Greece, the European Union, the IMF and the ECB teamed up to save the day, in what today is called the troika. Actually it was the first time something like this ever happen. Never before had the world seen such an international consortium of such financial fire power like this.

So this troika looked at the Greek situation and decided that Greece would be able to make it, just as long as it got some help from its friends. So it laid out a plan, whereby Greece would be put on the path to growth and sustainability, as long as it did not default on its debt. So in order for this not to happen, it decided to roll over Greece's debt, until such time that Greece would be able to return to the markets and the troika could get the money back.

So it rolled over about 180 billion euros in Greek debt and gave the market (European banks) a break. The banks got top euro for their bonds, compared with what they would have gotten in the secondary market. But the troika was not worried, for its models told it that Greece would once again be sustainable, and at some point in the future, it would get its money back.

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Alpha Bank: Πρωτογενές πλεόνασμα 0,5% του ΑΕΠ το 2012

Το Βήμα

27 Σεπτεμβρίου 2012

Η εκτέλεση του προϋπολογισμού του 2012, σύμφωνα με το εβδομαδιαίο δελτίο του τμήματος μελετών της Alpha Bank, παρά την μεγαλύτερη ύφεση, όχι μόνο είναι πολύ πιθανό να έχει αποτέλεσμα καλύτερο του αναμενόμενου αλλά και να διαμορφωθεί τελικά πρωτογενές πλεόνασμα ήδη από το 2012, στην βάση της σημαντικής ενίσχυσης των βεβαιωθέντων πρόσθετων φόρων εισοδήματος με την αποστολή των εκκαθαριστικών και της μόνιμης μείωσης των δαπανών που έχει συντελεσθεί με τις συνεχείς περικοπές μισθών και την αποχώρηση 147,5 χιλιάδων υπαλλήλων στον δημόσιο τομέα της οικονομίας τα τελευταία τρία χρόνια.

Με βάση την υλοποίηση του Π2012 στο 8μηνο Ιαν.-Αυγ. 2012 (Πίνακας 1), αναμένεται εφέτος να διαμορφωθεί πρωτογενές πλεόνασμα στη γενική κυβέρνηση ύψους άνω του 0,5% του ΑΕΠ (αντί για έλλειμμα -1,5% του ΑΕΠ που προβλέπει το ΔΝΤ).

Οι ανωτέρω ευνοϊκές εξελίξεις στην εκτέλεση του Π2012, σε συνδυασμό με την ολοκλήρωση των διαδικασιών για την καταβολή στην Ελλάδα της δόσης των € 31,5 δις, μπορεί να οδηγήσουν σε πολύ σημαντική βελτίωση του οικονομικού κλίματος στη χώρα με αποτέλεσμα η πτώση του ΑΕΠ στο 2ο 6μηνο του 2012 να είναι σημαντικά χαμηλότερη από την πτώση του στο 1ο 6μηνο του 2012, με την πτώση του ΑΕΠ το 2012 να μην υπερβεί το -6% συνολικά, και, επιπλέον να τεθούν σε ισχύ οι προϋποθέσεις για την ανάκαμψη της οικονομίας από το 2ο 6μηνο του 2013 επισημαίνει το Δελτίο.

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The end of the euro’s Indian summer

Economist
September 29, 2012

The sugar-rush brought on by the European Central Bank’s pledge to intervene in bond markets to help troubled euro-zone countries—some diplomats call it “Mario Draghi’s ice cream”—was bound to fade at some point. But nobody expected it to fade quite so suddenly this week.

Anti-austerity protests in Spain and Greece, uncertainty over their bail-out terms, the resurgence of Catalan secessionism, the likely departure of Mario Monti as Italy’s prime minister next year, obstacles to creating a credible banking union (see Charlemagne) and a darkening economic outlook all combined to dispel hope that the euro zone was out of the woods. Spanish and Italian bond yields shot back up and European stockmarkets fell.

The summer’s panic about the euro zone had been assuaged by the ECB’s announcement of plans to buy unlimited amounts of short-dated debt of vulnerable countries such as Spain and Italy. This backstop would depend on their governments first seeking assistance from the euro-zone rescue funds, and then submitting to a formal, externally monitored reform programme.

Both out of national pride, and because Germany does not want Spain to ask for more money, the Spanish government has hesitated about taking the ECB’s outstretched hand. Behind European officials’ public praise for the deficit-cutting measures taken by Mariano Rajoy, the Spanish prime minister, there is dismay over his ineptness in handling the crisis, not least the ever-changing estimates of the money needed to recapitalise Spain’s banks.

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The other moral hazard

Economist
September 29, 2012

Stitch by stitch, Germany is unravelling the carefully knitted deal that offered the euro zone the best chance yet of overcoming its crisis. Until this week European officials dared to imagine they had got ahead of the markets with two big moves. First, the ECB declared that it will act as a lender of last resort for troubled countries like Spain (if they agree to a reform programme). And second, the euro zone pledged to create a banking union to sever the death loop between weak banks and weak sovereigns. Now that the ECB had averted the threat of the euro breaking up, others have space and time to repair its design flaws.

If only it were so easy. Protests and strikes against austerity have restarted in debtor states, and secessionism is stirring in Spain. Just as worrying, creditor states are showing every sign of going slow, and even reneging, on their promises to strengthen the euro zone. Rückfall, the German word for backsliding, is one reason the euro zone is being pushed back into an acute phase of the crisis.

Start with the conditional promise of intervention by the ECB’s president, Mario Draghi. This is designed to hold down a country’s borrowing costs, especially for short-dated bonds, and dispel “unfounded fears” about the future of the euro. In his campaign to delegitimise the policy, Jens Weidmann, the Bundesbank chief, has resorted to drawing a parallel between Mr Draghi and Mephisto in Goethe’s “Faust”. The German government, though in favour of the ECB’s scheme, is uncomfortable. It has told Spain not to ask for more help—the essential first step that would allow the ECB to act.

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Stage Three for the Euro Crisis?

by J. Bradford DeLong

Project Syndicate
September 27, 2012

The first two components of the euro crisis – a banking crisis that resulted from excessive leverage in both the public and private sectors, followed by a sharp fall in confidence in eurozone governments – have been addressed successfully, or at least partly so. But that leaves the third, longest-term, and most dangerous factor underlying the crisis: the structural imbalance between the eurozone’s north and south.

First, the good news: The fear that Europe’s banks could collapse, with panicked investors’ flight to safety producing a European Great Depression, now seems to have passed. Likewise, the fear, fueled entirely by the European Union’s dysfunctional politics, that eurozone governments might default – thereby causing the same dire consequences – has begun to dissipate.

Whether Europe would avoid a deep depression hinged on whether it dealt properly with these two aspects of the crisis. But whether Europe as a whole avoids lost decades of economic growth still hangs in the balance, and depends on whether southern European governments can rapidly restore competitiveness.

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Data Points to Further Gloom in Euro Zone

New York Times
September 27, 2012

The outlook for the euro zone remained unsettled Thursday, as data showed that confidence among European businesses and consumers continued to fall in September.

The European Commission reported that its economic sentiment indicator for the 17-nation euro zone fell by 1.1 points, to 85.0, the seventh consecutive month of decline. For the broader, 27-member European Union, confidence fell by 0.9 points in September, to 86.1. An indicator above 100 shows more confidence than not about the economy in five sectors surveyed.

The commission attributed the weakening to slipping confidence in four of the sectors: services, retailing, industrial and consumer. The commission pointed to more optimism in the fifth sector, construction, as a promising sign.

The data “serve as another warning that the euro zone economy is sinking further into recession,” Jonathan Loynes, chief European economist at Capital Economics, wrote in a note, adding that it dashed hopes that the European Central Bank’s pledge Sept. 6 “to take more decisive policy action might have improved sentiment towards the broader economy.”

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Slumping Euro Dogged by Doubts

Wall Street Journal
September 27, 2012

After its biggest rally in months, some old doubts about the euro are creeping back in.

Investors cheered the European Central Bank's proposal to buy the debt of troubled euro-zone members, announced on Sept. 6. But the plan already has hit its first potential snag: Spain, the region's fourth-largest economy, hasn't yet requested aid, a key condition for setting a bailout in motion.

Some euro bears say the ECB's bond-buying plan, which many took as a sign Europe had turned a corner in addressing its debt problems, is turning out to be just the latest temporary jolt for a currency in the middle of a protracted slide against the dollar. Since hitting a four-month high on Sept. 14, the euro is down in six of the last nine trading days, ending New York trading at $1.2913 Thursday. The euro is still up 7% from a two-year low hit in July.

The crisis "is like a long-term illness that flares up periodically, and it's not over by any stretch of the imagination," said Nicholas Pifer, who oversees $7 billion as head of Columbia Management's fixed income group and has bet against the euro. "The history of the euro crisis so far has seen measures announced that looked good but whose implementation proved difficult."

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Greece's other debt problem

Reuters
September 27, 2012

The two main political parties in Greece are facing their own financial crisis. New Democracy and Pasok, the key members of the country's coalition government, are close to being overwhelmed by debts of more than 200 million euros, say rivals, as the big parties head for a slump in state funding because of falling public support.

In Greece's state-financed political system, parties that receive more votes get more funding. Relying on past good results, the big political parties have pledged future state funding as collateral for bank loans. But in the most recent poll their support collapsed, leaving them with big loans and facing much smaller incomes.

Banking sources familiar with the issue say that conservative New Democracy and socialist Pasok now owe a combined 232 million euros to Greek banks. Some of the loans are going unpaid, those sources say. The debts far exceed the combined 37 million euros the parties received in state funding last year - a figure set to decline.

The parties' debts raise questions about potential conflicts of interest because the government is in hock to a financial system that it also needs to reform. Athens is already struggling to implement spending cuts and reforms demanded by the European Union, International Monetary Fund (IMF) and European Central Bank (ECB) in return for the 130 billion euro bailout keeping Greece afloat. On Wednesday unions called a nationwide strike protesting against austerity.

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IMF, EU clash over Greece's bailout prospects

Reuters
September 26, 2012

Greece's international official lenders are at loggerheads over how to solve Athens' debt crisis, threatening more trouble for the euro.

Officials from Greece and the "troika" of European Union, European Central Bank and International Monetary Fund have told Reuters tensions have risen in recent weeks as negotiators wrangle over further budget cuts, with the IMF adamant that Greece reduce its debt further.

European officials say the IMF is also pushing them to restructure debts Athens owes them, an uncomfortable prospect for some of Europe's leaders who find the idea of their governments taking losses on the debt politically unpalatable.

"The problem is not between the IMF and Athens, it's between the IMF and the EU," one Greek official said, speaking on condition of anonymity. That view was confirmed by sources familiar with the thinking in Brussels and Washington.

Already facing an electoral backlash over bailouts and austerity budgets, and unsure what may be needed to defend the creaking public finances of heavyweight countries like Spain and Italy, EU leaders do not relish the idea of swallowing tens of billions of euros of losses on their official holdings of Greek government bonds.

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Europe's austerity protests: mad as hell

Guardian
Editorial
September 26, 2012

In all the dozens of summits and meetings held over the past couple of years about how to keep the euro show on the road, one subject has been notably absent. Amid all their talk of haircuts (on debt values) and tranches (of loans), European leaders have barely talked about the people who are bearing the brunt, first of the crisis and then of the throat-clearing that passes for firefighting in Brussels. This is not accidental. The euro project has relied upon draining the politics out of the inherently political: the very existence of a 17-nation economic union without a common treasury is testimony to that.

Especially amid austerity, however, it is impossible to ignore the politics. More than 200,000 demonstrators took to the streets of Athens on Wednesday. Thousands besieged parliament in Madrid on Tuesday. Last week more than half a million people marched in cities across Portugal to protest against cuts in social security. This is a pan-southern-European pushback against austerity, while the package is still being negotiated. The political strains are causing old regional fissures to re-emerge. One fifth of the population of Catalonia, 1.5 million people, marched last week in what can only be interpreted as a surge of separatist sentiment. For them it is not just the contract with Brussels and Frankfurt that needs to be renegotiated, but the contract with Madrid – in other words, the constitution. With regional elections coming up on 25 November, this is not something Madrid can ignore. Initially they wanted to collect their own taxes, which they would share with Madrid. When that was rejected, the price of peace escalated. Popular outrage over Catalan money going elsewhere, amid health and education cuts, is fuelling demands that the money stays put.

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Το πολιτικό σύστημα, συμπολιτευόμενο και αντιπολιτευόμενο, αντιπροσωπεύει τους «εντός»

του Φώτη Γεωργελέ

Athens Voice
26 Σεπτεμβρίου 2012

Είναι κάτι ξύπνιοι που λένε, πάνε χαμένες οι θυσίες του ελληνικού λαού. Είναι οι ίδιοι ξύπνιοι που λένε τα νούμερα δεν βγαίνουν, η συνταγή είναι λάθος. Αυτοί όλοι προσπαθούν να σβήσουν την πραγματικότητα, να μας κάνουν να ξεχάσουμε την ιστορία. Να ξεχάσουμε την τραγική τριετία 2007-2009, όταν το πρωτογενές έλλειμμα του δημοσίου έφτασε τα 24 δις το χρόνο. Τότε δεν ξέραμε τι σημαίνουν τα νούμερα, τώρα όμως που έχουμε καταλάβει τι κόπο, τι θυσίες και τι αίμα αντιπροσωπεύουν τα δις, πόσο δύσκολο είναι να περικοπούν 11,5 δις τα επόμενα 2 χρόνια, τώρα ξέρουμε τι παραλογισμός ήταν το ελληνικό δημόσιο να καταναλώνει 24 δις παραπάνω από όσα είχε κάθε χρόνο, να δανείζεται 24 δις κάθε χρόνο.

Αυτό που αποσιωπούν οι ξύπνιοι είναι ότι ο υπόλοιπος πλανήτης έπαψε να μας δανείζει. Θέλουν να κρύψουν ότι αυτά τα 24 δις, μέσα σε λίγα χρόνια, με οποιονδήποτε τρόπο, έπρεπε να τα εξοικονομήσουμε. Γιατί κανείς πια δεν μας τα δάνειζε. Αυτή ήταν η πρώτη μεγάλη απάτη της αντιμνημονιακής ρητορικής. Όλα τα κόμματα που συμμετείχαν στις κυβερνήσεις και όλα τα υπόλοιπα που αντιπολιτεύονταν, αυτή τη σκληρή πραγματικότητα προσπαθούσαν να κρύψουν. Αντιστέκονταν, δέχονταν πιέσεις, όρθωναν το παράστημά τους στις τρόικες, διαπραγματεύονταν, απέρριπταν, καταργούσαν, για να μην πουν την αλήθεια: Δανεικά τέλος. Κάτι πρέπει να κοπεί. Το τι ήταν το ερώτημα.

Σκέψου μόνο για ένα λεπτό πόσο διαφορετική θα ήταν η ιστορία των τελευταίων χρόνων, αν το πολιτικό σύστημα έκανε αυτή την παραδοχή, αν έλεγε την αλήθεια. Αν έλεγαν δηλαδή, ναι, τέρμα τα δανεικά, πρέπει να περικοπούν 24 δις το χρόνο και ο καθένας λέει την πρότασή του, λέει από πού θα γίνουν οι περικοπές. Εκεί αμέσως θα ξεχώριζαν οι δίκαιοι από τους άδικους, απ’ αυτούς που προσπαθούν να κρατήσουν ανέγγιχτο το χρεοκοπημένο σύστημα της διαφθοράς και της σπατάλης. Αυτό, σύσσωμο το πολιτικό σύστημα που εκπροσωπεί το κατεστημένο, το αποσιώπησε με μαεστρία. Οι Συντηρητικοί «αντιστέκονταν στις επιταγές της τρόικας» και οι Πολύ Συντηρητικοί ήθελαν ακόμα μεγαλύτερη αντίσταση: να μη μειωθεί κανένα έλλειμμα, να μη θιγεί ο δημόσιος τομέας της σπατάλης και της διαφθοράς καθόλου.

Ποιοι ήταν αυτοί που δεν ήθελαν μειώσεις, που αμφισβητούσαν την πραγματικότητα; Αυτοί που δεν ήθελαν να χάσουν οι ίδιοι τίποτα. Την πραγματικότητα όλοι την ήξεραν. Οι μειώσεις ήταν αναπόφευκτες. Γιατί απλώς δεν μας δάνειζαν πια. Το παιχνίδι ήταν εις βάρος ποιων θα γίνουν οι μειώσεις.

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Μπρος-πίσω για τη διαφθορά

του Πάνου Καζάκου

Τα Νέα
26 Σεπτεμβρίου 2012

Η πολιτική και διοικητική διαφθορά έχει εξελιχθεί σε μείζον θέμα της δημόσιας συζήτησης. Μας την υπενθύμισαν πάλι πρόσφατα επεισόδια («λίστα των 32», συντάξεις-μαϊμού κ.ά.) που δηλητηριάζουν το πολιτικό κλίμα. Πρέπει επομένως να δούμε την ευρύτερη εικόνα χωρίς κυνήγι μαγισσών.

Η διαφθορά αποτέλεσε μέρος της παθολογίας που οδήγησε σε τόσο βαθιά οικονομική κρίση και εμποδίζει σήμερα τις προσπάθειες για προσαρμογή της χώρας στις νέες διεθνείς συνθήκες. Σύμφωνα με πρόσφατη διαπίστωση της Global Financial Integrity «μόνο μεταξύ 2003 και 2011 βγήκαν από την Ελλάδα 261 δισ. δολάρια παράνομου χρήματος που προερχόταν από εγκληματικές ενέργειες, διαφθορά και φοροδιαφυγή» (εφημερίδα Το Βήμα 2.9.2012).

Το κόστος της πολιτικής και διοικητικής διαφθοράς για το σύνολο είναι τεράστιο. Συνήθως φαίνονταν οι μεγάλης κλίμακας περιπτώσεις υποβρυχίων κ.ά. Τώρα έρχονται ολοένα και συχνότερα στην επιφάνεια οι μικρής και μεσαίας κλίμακας περιπτώσεις (π.χ. δωροδοκίες για μικροεργολαβίες του κράτους κ.λπ.). Συνολικά βαραίνουν το ίδιο: Η μικρή διαφθορά έχει ως πρότυπο ή άλλοθι τη μεγάλη, η μεγάλη χρειάζεται τη μικρή για να έχει και πολιτικούς συμμάχους.

Πιο συστηματικά, η πολιτική και διοικητική διαφθορά επιβαρύνει τις τιμές εις βάρος του κοινού (π.χ. των φαρμάκων), γεννά τη φυγή κεφαλαίων, χειροτερεύει την ποιότητα των υπηρεσιών και προμηθειών, πράγμα που συμβολίζουν καθαρά τα υποβρύχια που γέρνουν, μειώνει τα φορολογικά έσοδα λόγω της εκτεταμένης συναλλαγής στις εφορίες, προκαλεί αδικαιολόγητα χρέη. Μέρος του χρέους που συσσώρευσε η χώρα οφείλεται στον ιδιωτικό πλουτισμό μέσω της διαφθοράς.

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Υπόγειες διαδρομές

του Ναπολέοντα Μαραβέγια

Τα Νέα
26 Σεπτεμβρίου 2012

Η συνεχιζόμενη πίεση προς την Ελλάδα από τους εταίρους και δανειστές μας, σε συνδυασμό με την αδυναμία των ελληνικών κυβερνήσεων να εφαρμόσουν όσα έχουν υποσχεθεί, φαίνεται να «αποδίδει» περισσότερο στο επίπεδο της δημιουργίας αρνητικών αισθημάτων σε ευρύτατα κοινωνικά στρώματα απέναντι στο ευρώ και στην ευρωπαϊκή προοπτική της χώρας και λιγότερο στο επίπεδο της δημοσιονομικής προσαρμογής, εφόσον δεν έχει ακόμη επιτευχθεί πρωτογενές πλεόνασμα στον προϋπολογισμό (δηλαδή θετικό υπόλοιπο εσόδων-δαπανών χωρίς τους τόκους), ούτε και στο επίπεδο του ελλείμματος τρεχουσών συναλλαγών, εφόσον ακόμη βρίσκεται περίπου στο 9% του ΑΕΠ.

Οι υπόγειες διαδρομές των ρευμάτων του αντιευρωπαϊσμού μπορεί ακόμη να μην είναι αισθητές στην επιφάνεια, δηλαδή στο επίπεδο των κομμάτων που έχουν σήμερα την πλειοψηφία, αλλά αυτό δεν σημαίνει ότι αν συνεχιστεί η αφόρητη πίεση πάνω στην ελληνική κοινωνία από τους ευρωπαίους δανειστές και εταίρους μας δεν θα υπάρξει σύντομα ορατή πολιτική μεταστροφή προς άλλες κατευθύνσεις, ενδεχομένως επικίνδυνες για τη γεωπολιτική θέση και τη δημοκρατική πορεία της χώρας μας.

Οι εταίροι και δανειστές μας δεν έχουν ίσως συνειδητοποιήσει ότι η διαρθρωτική και δημοσιονομική προσαρμογή που απαιτούν, και πρέπει να γίνει, δεν μπορεί να πραγματοποιηθεί μέσα σε ασφυκτικά χρονικά όρια και με αγανακτισμένους κρατικούς υπαλλήλους από τις συνεχείς περικοπές των μισθών τους και υπό την απειλή απολύσεων.

Περισσότερα

The price of saving the eurozone

by Robert Peston

BBC News
September 26, 2012

A few things have happened in the weeks since I was last here, so there may be some merit in reflecting - briefly - on where we find ourselves at the beginning of the new school term (so to speak).

On balance, the biggest risk to our prosperity, total meltdown of the eurozone, has diminished, though it has not been extinguished.

As you'll know because I've bored you to tears about it many times, there is a compelling argument that the long-term survival of the eurozone requires its national members to cede considerably more autonomy than they have hitherto done on the management of their economies and public finances: it requires the eurozone being transformed from pure currency union into a political union that looks more like a federation.

So what was most important over the summer is that there have been greater moves in that direction than at any point in the eurozone's inglorious history.

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Former Greek Prime Minister Papandreou on Euro

Bloomberg

September 25, 2012

Former Greek Prime Minister George Papandreou talks about the prospects of Greece leaving the euro and the impact of the euro-zone debt crisis on the country. He speaks with Betty Liu from the Clinton Global Initiative in New York on Bloomberg Television’s “In the Loop.”



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Why exit is an option for Germany

by Martin Wolf

Financial Times
September 25, 2012

Should Germany leave the euro? It is, after all, the big country with an obvious exit option. The question becomes more pertinent after the decision by Angela Merkel, Germany’s conservative chancellor, to support Mario Draghi, president of the European Central Bank, against Jens Weidmann, her appointee as head of the Bundesbank, over plans to buy bonds of governments in difficulty. The president of the Bundesbank, Germany’s most respected institution, has now become a spokesman for conservative German eurosceptics. The ECB, Germans realise, will not remain a reincarnated Bundesbank. Once again, we are reminded that the eurozone is set to be a miserable marriage. Might a separation, however disruptive, be better?

If we are to address that question from a German perspective, we must distinguish false arguments from valid ones. As Paul de Grauwe, the Belgian economist, now at the London School of Economics, shows in a recent co-authored article, it is easy to find examples of the former.

This paper asks whether the accumulation of net claims within the European System of Central Banks means that Germany would lose a great deal if the eurozone were to break up. Its response is: no.

First, Germany has accumulated net claims on the rest of the world – and on other members of the eurozone – not because of internal central bank accounting, but because it has large current account surpluses. Germans have been running two businesses: exporting goods, at which they are excellent, and importing financial claims, at which they are not. In brief, Germany’s surpluses have exposed Germans to financial risk. But balances inside the eurosystem are not a good indicator of that risk. They have exploded, argues the paper, because of speculative financial flows, not current account imbalances (see chart).

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Inequality and the euro zone: Coincidence or cause?

Economist
September 25, 2012

Inequality is one of the great issues of the day and a key inspiration for the Occupy protesters. The bottom 10% of the US population has hardly seen any gain in real incomes over the last 25 years and this has been accompanied by a decline in social mobility; it is harder to escape the circumstances of your birth than it used to be. But this is a phenomenon that has occurred across the western world; an OECD report last year showed that, since the mid-1980s, the real incomes of the top decile have risen from 1.9% a year while those of the bottom decile have risen just 1.3%. The average Gini coefficient (a measure of inequality where 0 means income is equally shared and 1 means that one person has all the wealth) has risen from 0.29 to almost 0.32.

But looking through the data, one factor leaped out. Here is a rearranged version of the OECD's table 1, with the countries ranked by the gap between bottom decile and top decile income growth. So countries which have reduced inequality are at the top, those where inequality has increased are at the bottom.

The four countries at the top of the table are four of the PIGS which have been at the heart of the debt crisis. Is this a coincidence? The OECD report doesn't really discuss the reason for inter-country differences except to say that there may be a general convergence of Gini coefficients (Chile and Turkey are becoming less unequal, while the Scandinavian countries are becoming less equal).

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Euro Zone Considers Central Budget to Fix Cracks

Wall Street Journal
September 25, 2012

Euro-zone governments have begun discussions about creating a central budget for the currency union aimed at smoothing over some of the region's economic divergences, after Germany indicated support for the idea, European officials say.

The discussions are part of a push toward a limited "fiscal union," after the economic crisis revealed fatal flaws in the setup of the common currency. Those limitations have manifested themselves in the recessions that have engulfed countries such as Greece, Portugal and Ireland after the 2008 financial meltdown, while strong economies such as Germany have recovered much faster.

Until now, much of the fiscal-union debate has focused on the prospects for issuing joint euro-zone debt—so-called euro bonds—but that idea has been blocked by fierce opposition from Berlin and the fact that it would contravene a central element of European Union treaties.

It is partly because of that resistance that the debate has now shifted to a centralized budget for the euro zone that could be financed by rerouting a slice of national taxes, such as corporate tax or value-added tax, to Brussels, rather than issuing euro bonds, according to European officials.

The idea was included in a paper on the overhaul of the euro zone prepared by European Council President Herman Van Rompuy, which formed the basis of talks between the council and member states in Brussels last week.

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Learning from past crises: Into the safety zone

by Caroline Van Rijckeghem and Beatrice Weder di Mauro

Vox
September 25, 2012

Lessons from the past suggest democracies with strong economic fundamentals do not default on their debt. This column suggests high growth and low deficits are key but that growing discontent as the result of austerity may be the most important factor yet in influencing the probability of default. Eurozone countries, therefore, need to build a higher safety buffer of good fundamentals to ensure safety from default.

Since the lost decade of the 1980s a rich literature on financial crises has evolved, including a theoretical literature which emphasised the potential for self-fulfilling expectations within a zone of vulnerability (e.g. Krugman 1996). The empirical counterpart of this literature focused on the probability of crisis given fundamentals, but did not try to delineate the zone of vulnerability, or the complementary safety zone.

Our contribution to that literature was to focus on the border of the safety zone for sovereign debt. In particular we investigated conditions under which default on external and domestic sovereign debt never happened in low and middle income countries from 1974-2001 (see Van Rijckeghem and Weder 2009, which builds on the methodology of Osband and Van Rijckeghem 2000).

Defaults on external debt were defined based on Standard & Poor’s classifications while defaults on domestic debt were defined based on Standard & Poor’s or a large increase in credit to the government. Near-defaults which were only avoided through external assistance were not considered as defaults. We considered democracies and non-democracies separately. We found that default never occurred in parliamentary democracies with broad money nine times smaller than foreign-exchange reserves or in democracies with less short-term debt than reserves and with growth over 3.4%, for example. For domestic debt, no democracies entered into default with inflation below 7%.

These results did not mean that debt crises would never be observed under these configurations in the future, but did indicate that if a default were to occur under these configurations, it would be a very unusual event. In fact, it was possible to calculate the probability of a default occurring under these or better fundamentals using simple non-parametric statistics. With 39 external debt defaults between 1974 and 2001, the 40th external default had a 2.5% chance of occurring at fundamentals better than those in the past.

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Eurozone should fix its banks US way

by Philipp Hildebrand and Lee Sachs

Financial Times
September 24, 2012

Mario Draghi, European Central Bank president, has reduced the risk of a eurozone break-up by undertaking to buy unlimited amounts of sovereign bonds in the secondary market. ECB purchases will require deep budgetary and economic reforms by participating nations. Angela Merkel, German chancellor, is right to insist on these reforms over time. But a genuine solution to the crisis also requires shoring up Europe’s banking system to restore the flow of credit to businesses and households.

Europe must ultimately grow its way out of its crisis. Economies cannot grow unless banks have sufficient capital to lend and businesses have the confidence to borrow to expand their operations. As was the case in the US in 2008 and 2009, central bank intervention cannot succeed on its own. Then, actions by the US Federal Reserve were bold, creative and necessary to help put a floor beneath a crumbling credit system. However, the Fed was limited in what it could achieve on its own. In the US, the end of the banking crisis required private capital investment, encouraged by incentives and financial commitments from the government. The same must happen in Europe.

Now is the time to rebuild confidence in Europe’s weakened banks through an accelerated introduction of robust, credible capital standards and the injection of new private capital. Banks will begin to lend only when they have sufficient capital and liquidity. The conventional wisdom that more robust capital standards constrain lending is borne out by neither economic theory nor the facts. In the US, where the largest banks were compelled to raise capital in 2009, business loans at commercial banks have increased significantly since.

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Crisis shuts a third of shops in Athens city centre

Reuters
September 24, 2012

Greece's deep recession has forced almost a third of businesses in the capital's commercial district to close down as shrinking incomes and frequent strikes drive Athenians away.

Tens of thousands of small businesses, which make up a big chunk of the struggling economy, have shut since Greece secured a 110-billion-euro bailout package in 2010 in exchange for promises of painful austerity measures.

On the capital's cobbled pedestrian shopping streets, long lines of shops are boarded shut while others have "Everything must go" signs plastered across their windows. Some arcades, once bustling with activity, are empty and enclosed by derelict buildings.

In the city's "commercial triangle", where generations of merchants had run successful businesses a stone's throw from the central Syntagma Square, an August census by retail lobby group ESEE found 31 percent of shops had closed.

That was up 13 percent from August 2010, just months after the government secured the first of two multi-billion euro international rescue packages.

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Troika Nearly Doubles Estimate of Greek Shortfall

Spiegel
September 24, 2012

Greece's budget shortfall now totals 20 billion euros, according to preliminary estimates by international lenders, SPIEGEL has learned. Prime Minister Antonis Samaras has asked public-sector creditors to forgive some debt. Meanwhile, Berlin and the European Commission are divided over when the decision on Greece's fate should be taken.

The Greek government's budget deficit is bigger than expected and currently amounts to some €20 billion ($26 billion), according to preliminary estimates by the so-called troika made up of the European Commission, European Central Bank and International Monetary Fund, SPIEGEL has learned. The figure is almost double previous estimates.

The next tranche of EU aid can only be paid out to Greece when that budget gap has been closed. The government of Prime Minister Antonis Samaras is believed to have made several requests for government creditors to forgo debt repayments. He is also hoping that lenders will give his government two years longer to fulfill his austerity program. In that case, Greece would probably require an additional €20 billion in aid.

Meanwhile a row has erupted between the German government and the European Commission over when the decision will be taken on whether Greece will get any fresh money at all.

The Commission wants a decision to be reached at the next EU summit on Oct. 18-19. But Berlin says there won't be reliable figures available until November at the earliest.

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Democracy’s Burning Ships

by Luigi Zingales

Project Syndicate
September 24, 2012

Since the late 1970’s, the academic diffusion of game theory has led macroeconomists to emphasize the importance of “commitment,” a strategy that aims to enhance long-term economic outcomes by restricting policymakers’ discretion. The idea seems counterintuitive: How can less produce more?

While not historically accurate, one of the best examples of a strategic commitment is provided by the legend of Hernán Cortés, according to which, in his quest to conquer Mexico, he decided to burn the ships that had brought his expedition from Spain. At first, this might seem like a crazy move: Why intentionally destroy the only possible way out in case of defeat? Cortes allegedly did it to motivate his troops. With no escape route, soldiers were highly motivated to win. Alexander the Great is said to have done something similar when conquering Persia.

To produce its benefit, a commitment strategy should be credible – that is, it cannot be reversed quickly. In this sense, Cortés’s strategy was perfect: in case of defeat, the Spanish would have no time to rebuild the burned ships. To work properly, a commitment strategy should also be costly in case of failure: had Cortés lost, no Spanish soldier would have escaped alive. It is precisely this cost that helped motivate his soldiers.

The problem is that we are bound to hear about only the successful historical examples of such a strategy. Had Cortés’s strategy failed, he would have gone down in history – if he was remembered at all – as an arrogant fool who thought that he could defeat a great empire.

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Europe Plans to Leverage Euro-Zone Bailout Fund

Spiegel September 24, 2012

Officially, the ESM permanent euro-zone bailout fund is worth 500 billion euros. That, though, might not be enough, which is why euro-zone governments are now planning to introduce levers that could mobilize up to 2trillion euros, SPIEGEL has learned. Finland, though, is skeptical of the idea.

With the launch of the permanent common-currency bailout fund, the European Stability Mechanism (ESM), just around the corner, euro-zone member states are looking into ways to leverage the €500 billion ($647 billion) available to the fund, SPIEGEL has learned. But with Finland still concerned about the leveraging plans, it is unlikely that they will be initially included when the ESM is launched on Oct. 8.

The plan envisions the continuation of leverage instruments currently in use in the temporary euro bailout fund, the European Financial Stability Facility (EFSF). Should they be applied to the ESM, the permanent fund could be able to mobilize up to €2 trillion instead of the €500 billion lending capacity it currently has -- a size that would make it easier to provide emergency aid to countries as large as Spain and Italy, for example.

The leveraging proposal was a focus of last Friday's meeting of euro-zone finance ministers in Cyprus. German Finance Minister Wolfgang Schäuble is in favor of the plan, sources told SPIEGEL. But Finnish Finance Minister Jutta Urpilainen is worried that such a change is dramatic enough that it would require the ESM to be resubmitted to Finnish parliament for approval.

Plans for leveraging the ESM envision creating a vehicle to attract private investors as was created for the €440 billion EFSF last year. For the temporary fund, the plan called for protecting investors against the first third of losses they might sustain on purchases of EFSF bonds. In addition, to attract additional private funding, potential investors were promised that the euro zone would cover the riskiest portion of, for example, purchases of Spanish government bonds. Private investment would cover the rest of such purchases.

Finland, however, is worried that adopting such a plan for the ESM would conflict with the ESM's preferred creditor status, which stipulates that the fund be paid back prior to other creditors.

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