How Scary Can Greece Get?

by Mark Gilbert

Bloomberg
December 31, 2014

With Greeks getting the opportunity to vote on their economic future, let the scaremongering begin. European Union leaders will utter menacing words about the euro-exiting consequences of straying from the path of fiscal righteousness. The threat of financial Armageddon will be bandied about. As is often the case, one of the most useful ways to distinguish signal from noise is to follow the money.

Here's a chart suggesting the Greeks themselves knew all along that the euro crisis wasn't over. It uses official figures from the Bank of Greece to track how much money is on deposit with banks in the country. And it shows that most of the money that fled at the start of the emergency never came back:

When there's a run on a bank -- think of the perennial Christmas movie, ``It's a Wonderful Life'' -- there's a rush to get your money out before your neighbor, in case the bank shuts its doors. When there's a run on a sovereign nation, there's a rush to get money out of the country before the government either imposes capital controls that will lock the cash behind its borders or decides to confiscate some or all of it.

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Greece’s Syriza no longer terrifies some investors

Financial Times
December 30, 2014

The charm offensive launched by Greece’s leftwing Syriza party to persuade foreign investors that it would not wreck the country’s economy and finances were it to win power suffered a notable hiccup last month.

After attending a meeting with Syriza economists in London, a hedge fund analyst wrote that their plans for the country were “total chaos” and warned of a run on bank deposits if the party came to power.

As that possibility draws near, with Syriza leading the polls and a snap election set for January 25, the more surprising factor may be the party’s success at dispelling at least some investors’ worst fears.

Alexis Tsipras, Syriza leader, has abandoned his pledge to “tear up” the bailout agreement with international creditors and is instead emphasising more moderate steps to address the debt load as well as his deep commitment to the euro.

Krishna Guha, of Evercore ISI, warned that, at a minimum, investors faced “a four-week period of elevated uncertainty in which eurozone risk assets will struggle to perform.”

But, Mr Guha added: “We believe that Tsipras will prove more pragmatic than past Syriza rhetoric suggests. He has opened back-channels to Berlin, Paris and Frankfurt, and has every incentive to try to negotiate relatively cosmetic changes to Greece’s programme and ride the early-stage Greek recovery rather than derail it.”

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Samaras’s failed gamble

Economist
January 3, 2014

Antonis Samaras, the centre-right Greek prime minister, lost one election on December 29th. Now he will have to fight another. His New Democracy party’s candidate for president, Stavros Dimas, fell 12 votes short of the required three-fifths majority in a third and final ballot by Greece’s 300 MPs. As the constitution demands, a snap general election will now be held on January 25th. ND is trailing the far-left Syriza opposition, according to the opinion polls. Once again, the prime minister’s chances of victory look slim.

Mr Samaras made two television appeals for lawmakers to back Mr Dimas, a former European environment commissioner, for the ceremonial post. His election would have kept the fragile ND-led coalition in power long enough to negotiate an exit from Greece’s unpopular austerity programme with the European Union and IMF, including a precautionary credit line from the euro-zone bail-out fund. Many independent and opposition lawmakers who rejected Mr Dimas are unlikely to be re-elected, yet not even self-interest persuaded them to back the government.

Such stubbornness heralds a bad-tempered election campaign. Alexis Tsipras, Syriza’s radical leader, calls Mr Samaras “finished”. He plans to renegotiate Greece’s bail-out. Although he no longer threatens to halt debt repayments unilaterally if his party comes to power, he still wants to secure a big write-off. Greece’s creditors would oppose that, and also Mr Tsipras’s proposals to reverse other reforms and launch a €11 billion ($13 billion) welfare package, to be financed by better tax collection. With more than €7 billion of lending suspended until Athens reaches agreement with its “troika” of creditors on more tax, labour and pension reforms, Greece will soon run into trouble. Hard-pressed taxpayers are already struggling; more than €1 billion of income and property tax goes uncollected every month. Mr Tsipras’s promises sound alluring to angry, impoverished Greek voters.

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Greece’s election: The euro’s next crisis

Economist
January 3, 2014

Ever since the euro crisis erupted in late 2009 Greece has been at or near its heart. It was the first country to receive a bail-out, in May 2010. It was the subject of repeated debate over a possible departure from the single currency (the so-called Grexit) in 2011 and again in 2012. It is the only euro country whose official debt has been restructured. On December 29th the Greek parliament failed to elect a president, forcing an early snap election to be called for January 25th. The euro crisis is entering a new, highly dangerous phase, and once again Greece finds itself at the centre.

Investors promptly swooned, with the Athens stockmarket falling by almost 5% in a single day, bank shares down by even more and Greek 10-year bond yields rising to a new 2014 high of 9.5% (over seven points above those for Italy). The reason for this collective outbreak of nerves is that the polls point to an election win for Syriza, the far-left populist party led by Alexis Tsipras (pictured). Although Mr Tsipras says he wants to keep Greece in the euro, he also wants to dump most of the conditions attached to its bail-outs, ending austerity, reversing cuts in the minimum wage and in public spending, scrapping asset sales and seeking to repudiate much debt. Such a programme seems, to put it mildly, to sit uncomfortably with Greece’s continuing membership of the singe currency.

The early election is likely therefore to create a political crisis in Greece. What happens beyond that is less clear. Investors seem to be betting that the people of Italy, Spain and France will peek at the chaos in Athens, shudder—and stick to the austerity that Germany’s Angela Merkel has prescribed for them. But that seems too sanguine to this newspaper. It is hard to believe that a Greek crisis will not unleash fresh ructions elsewhere in the euro zone—not least because some of Mrs Merkel’s medicine is patently doing more harm than good.

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Greek Election Campaign Kicks Off Amid Uncertainty, Nervousness

by Stelios Bouras

Wall Street Journal
December 30, 2014

Prime Minister Antonis Samaras formally requested the dissolution of Parliament on Tuesday, marking the beginning of a monthlong election period that the government has already started to frame as a referendum on Greece’s future in the eurozone.

In a meeting with President Karolos Papoulias, Mr. Samaras obliquely blamed the opposition Syriza party for blocking December’s parliamentary procedure to elect a new head of state.

Parliament’s failure to elect a new president in a third and final vote this week has forced Greece to hold early national elections. The elections are scheduled to be held on Jan. 25, some 18 months ahead of schedule.

“When it comes to the security and stability of our nation, then you understand that a battle for truth and responsibility is needed,” Mr. Samaras said. “With the country’s presence in Europe depending on this battle, you understand that we will approach it with a sense of responsibility for the future of our children.”

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Risk of Greek fallout hits European stocks

Financial Times
December 30, 2014

Tuesday 21:00 GMT. Global equities lost momentum on Tuesday, with European equities dropping as the snap election called in Greece drew in further casualties.

Shares on Wall Street also eased but benchmark indices still remain near record highs. The S&P 500 closed 0.5 per cent lower at 2,080.35 points, while the Dow Jones Industrial Average ended the session 0.3 per cent weaker.

The declines were steeper in Europe, where the international FTSE Eurofirst 300 ended the session down 1 per cent at 1,362.85, its weakest close for four sessions. The Xetra Dax 30 in Frankfurt fell 1.2 per cent, while the Paris CAC 40 lost 1.7 per cent and London’s FTSE 100 fell 1.3 per cent to 6,547.

The Athens General index fell a further 0.5 per cent to 816.15, heading back toward its weak point for the year of 756.8 after adding to Monday’s 12 per cent plunge.

The lingering uncertainty was caused by the potential rise to power of the leftwing Syriza party, which intends to renegotiate Greece’s international bailout. After heading sharply higher on Monday Greece’s 10-year sovereign borrowing costs eased by 6 basis points to 9.54 per cent.

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The odds of Greece leaving the euro have never been higher

by Matt O'Brien

Washington Post
December 29, 2014

Beware Greeks bearing the same political crisis over and over again. Because eventually this will be how the euro crisis ends: not with a bailout, but a ballot.

It's a tale as old as Homer, or at least it seems that way. The Greek government, you see, has once again collapsed under the weight of the country's austerity program, and anti-bailout parties are leading the polls ahead of new elections. This time, not that it really matters, the ruling coalition led by the right-of-center party New Democracy fell apart after it couldn't get its presidential nominee, a largely ceremonial role, confirmed in three tries. What does matter, though, is whether New Democracy, which is still running a close second, can hold on to power in the snap elections scheduled for Jan. 25. If it can't, then the far-left party Syriza will get its chance to lead Greece in a high-stakes game of chicken with Germany.

Syriza's platform is as simple as it is sensible. They want more spending and less debt. Specifically, they want to spend €1.3 billion, or $1.6 billion, more on food stamps, health care, and restoring electricity to households that can no longer afford it all to alleviate the worst of the country's suffering. And they also want to renegotiate how much of its debt, which even after getting written down before is still over 175 percent of gross domestic product, Greece will pay back. Bankers, of course, think this is "worse than communism," because Syriza is admittedly a little too sanguine about how much money it could raise by—stop me if you've heard this before—cracking down on tax evasion. But, as Wolfgang Münchau points out, there's nothing radical about what Syriza is asking for even if the party itself is. It's pointless to try to make somebody pay back money that they can't pay back. It will fail, and, until you admit that, push them even deeper into poverty. Or, in Greece's case, into the worst depression in history.

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Greece’s Bad Political Choices

Wall Street Journal
Editorial
December 29, 2014

Just when you thought it was safe to invest in Greece again, Greek politicians intervene. Prime Minister Antonis Samaras ’s failure Monday to secure 180 out of 300 parliamentary votes for his preferred presidential candidate has triggered a national election, to be held Jan. 25. The stock market tumbled, and yields on Greek bonds rose, in a familiar vote of no confidence.

The greatest fear is that the far-left Syriza party will win enough seats to form a government. Syriza and its leader, Alexis Tsipras, oppose the bailout Greece has received from the International Monetary Fund, European Commission and European Central Bank and have threatened to force a renegotiation that would require foreign creditors to take bigger haircuts on Greek debt. The party also promises free electricity, more spending and a rollback of even the small economic reforms that Greece has made.

Yet the closer the election comes, the warier voters become of Syriza. Its lead over Mr. Samaras’s New Democracy party is now between three and four percentage points, down from 6.5 points in October, and it’s not certain that Syriza could form a stable government even if it wins a majority. In this sense, Mr. Samaras’s tactic of engineering an early election to focus voters on his opponents’ shortcomings may be working.

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Greek Patience With Austerity Nears Its Limit

by Suzanne Daley

New York Times
December 29, 2014

Alexandra Nikolovieni, 55, lost her job escorting young children on a school bus four years ago and has not been able to find another one since. To help financially, her daughter and her son-in-law, who have two children, moved into her house. But now they have lost their jobs, too.

Ms. Nikolovieni, who volunteers at a food pantry in this suburb of Athens, says that every month she sees more and more people like her, qualifying for bundles of groceries and picking out used shoes for themselves or their children.

“Are things getting better?” she said. “I don’t think so.”

Nowhere have austerity policies been more aggressively tried — and generally failed to live up to results promised by advocates — than in Greece. After more than four years of belt tightening, patience is wearing thin, and tentative signs of improvement have not yet trickled down into the lives of average Greeks.

Now, after its Parliament failed to pick a president on Monday, forcing early elections, Greece faces a turning point in how to heal its devastated economy.

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Why Greece’s New Crisis Isn’t Spreading to the Rest of Europe

by Neil Irwin

New York Times
December 29, 2014

Remember “Grexit”? That would be the term, coined by Citigroup analysts in 2012, for Greece exiting the euro currency area, an event that at the time seemed to threaten the very idea of a united Europe and sent tremors through the global economy.

Now, Grexit may be back. But, remarkably, the sense of panic isn’t.

The Greek Parliament’s centrist governing coalition wasn’t able to agree on a new president Monday, and instead called new elections for Jan. 25. Polls point to victory by a more extreme party, the left-wing Syriza, which is skeptical of the European Union.

A Syriza victory would set up a standoff between the most likely prime minister, Alexis Tsipras, and the “troika” of the European Commission, European Central Bank and International Monetary Fund. The new Greek government is likely to insist on a renegotiation of bailout terms, and the European institutions must decide whether to acquiesce or adopt a hard line that might leave Greece with no other choice but to go out on its own outside the umbrella of the single European currency. (Germany’s finance minister articulated the hard-line position on Monday, but that’s what you would expect him to say at this stage.)

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Fears for fresh Greek crisis after poll called

Financial Times
December 29, 2014

Fears of a fresh Greek crisis were ignited on Monday after Athens called a snap general election that could bring the anti-bailout Syriza party to power and put the country on a collision course with international lenders.

Investor concerns were revived after the Greek parliament rejected Prime Minister Antonis Samaras’s nominee for president, automatically triggering an election which is to be held on January 25.

Monday’s dramatic events revive dormant questions about Greece’s place in the eurozone, just two years after the country’s debt crisis nearly triggered a break-up of the currency union and shook the European project to its core.

It comes with much of the eurozone struggling with weak growth, the rise of populist anti-EU parties and widespread disenchantment with the politics of austerity.

Investors took fright at the prospect of a victory by Syriza, which has pledged to write off much of Greece’s debt and renegotiate the terms of its bailout. The Athens bourse fell almost 11 per cent to a two-year low before regaining some ground. Greek 10-year bond yields jumped to a year high of 9.8 per cent while the government’s short-term borrowing costs hit a record high of 12 per cent.

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Another Greek Financial Crisis?

Wall Street Journal
December 29, 2014

Europe Editorial Page Editor Joseph C. Sternberg on what the failed presidential election Monday means for the economy.

Eurozone’s weakest link is the voters

by Gideon Rachman

Financial Times
December 29, 2014

The euro crisis is back. An election in Greece next month and the probable victory of Syriza, a far-left party, will frighten politicians and investors. Once again they will be engaged in a grim discussion of a connected series of possible horrors: debt-default, bank runs, bailouts, social unrest and the possible ejection of Greece from the eurozone.

It is somehow fitting that this crisis should break out at the very end of a year in which markets were lulled into believing that the euro crisis was essentially over. The cost of borrowing of debtor nations in Europe had fallen sharply, reflecting the widespread belief that the European Central Bank’s famous pledge to do “whatever it takes” to save the single currency has removed the risk of euro collapse.

That idea was always naive, as events in Greece are now illustrating. The weak link in the theory was European politics – and, specifically, the risk that voters would revolt against economic austerity and cast their ballots for “anti-system” parties that reject the European consensus on how to keep the single currency together.

If that consensus is broken the whole delicate house of cards of debt, bailouts and austerity begins to wobble. And that is what we are seeing in Greece now.

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How to Save Greece Now

by Mark Gilbert

Bloomberg
December 29, 2014

The Greek parliament's decision to trigger elections by rejecting Prime Minister Antonis Samaras's presidential candidate throws Europe back into turmoil. The European Union can avert a full-blown existential crisis, however, if it acknowledges that Greece's economic pain is real and not entirely self-inflicted, and that austerity fatigue is an issue for more than one euro member.

Polls suggest that the opposition Syriza party may win power in Greece; its leader, Alexis Tsipras, wants to unwind government spending cuts to halt what he calls a "humanitarian crisis'' in his country. If he does win the prime minister's job on Jan. 25, the EU will need to take his concerns seriously, recognize that fiscal backtracking is preferable to seeing Greece exit the euro, and concede that the unfortunate solution to the nation's unsustainable debt is to forgive some of it.

The economic hole Greece finds itself in is a deep one:

The rules of euro membership, laid out in the 1992 Maastricht Treaty, stipulate that a country's debt should be no higher than 60 percent of gross domestic product. Greece's is three times that much -- high enough for the common currency club to show Greece the door. EU leaders know, however, that their earlier failures to punish deficit offenses by Germany and France, combined with persistent transgressions since then, make enforcement impossible.

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Greece’s Fiscal Odyssey

by Maria Petrakis

Bloomberg
December 29, 2014

Greece has finally emerged from the six-year recession that shrank its economy by a quarter, tripled unemployment and left drugs in short supply. But the struggle over its finances isn’t over. Ever since it announced that hidden deficit spending had left the country broke, Greece has been a flashpoint in the European Union’s broader economic debates as well as a practical problem for the countries that banded together to adopt the euro. To richer northern countries, Germany in particular, Greece is a spendthrift needing harsh economic medicine. To many Greeks, the depth of their travails has shown the limits – or even folly — of the spending cuts and tax increases pressed on it and other ailing economies like Portugal, Spain, Ireland and Italy. In 2012, conflicts over Greece’s debts threatened to tear the euro zone apart. That sense of emergency has faded. Even so, another Greek political crisis is echoing on a continent mired in economic stagnation.

The Situation

Greece will hold a snap election in early 2015 after Prime Minister Antonis Samaras gambled on shoring up his fragile coalition by forcing a parliamentary showdown. He nominated a successor to the country’s current president, then failed to get the necessary support in three separate votes. The anti-austerity protest party Syriza is the favorite to win the ballot, which will likely be held Jan. 25. Syriza’s 40-year-old leader, Alexis Tsipras, has promised to write off some of Greece’s 322 billion euros of debt, most of it owed to the EU, the International Monetary Fund and the European Central Bank. Samaras has warned that could lead to Greece being forced to leave the euro, a prospect that drove up yields on Greek bonds — but didn’t alarm Greeks used to years of chaos. Samaras hopes to make his own deal with the troika of creditors to ease austerity.

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Spectre of Grexit once again

by Linda Yueh

BBC News
December 29, 2014

After the third and final unsuccessful attempt to elect a president, the stakes are high as Greece will call early elections.

The ruling coalition led by New Democracy is lagging in the polls behind Syriza, an anti-austerity party, whose rise reflects recent polls that show Greeks are frustrated with the EU and even suggest that more Greeks want to return to the drachma than keep the euro. It raises the spectre of Greece's exit from the single currency - or "Grexit" - once again.

It may be unsurprising, since Greece has only just emerged from six years of recession; when it has been that long, it is really more of a depression. The economy is more than 25% smaller now than in 2008, unemployment is around 25%, and roughly a quarter of households live in poverty.

Some 100,000 businesses have closed, and there are many who wonder what could get the economy going, as borrowing costs (yields on 10 year government bonds) have climbed back to 8%, a level considered to be unaffordable. Greece faced those levels when it first sought a rescue.

So, the austerity measures imposed from the rescue programmes piled on top of economic misery help to explain the volatile political landscape.

If Syriza wins the upcoming election and stands by its pledge to challenge the austerity programme, then it again raises the spectre of euro break-up.

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Beleaguered Greeks Seek a New Direction as Final Vote Looms

Wall Street Journal
December 23, 2014

For retired nurse Spyridoula Kantere, the Greek government’s nail-biting struggle to elect a new head of state is just a sideshow to her own daily struggles.

The 78-year-old widow, who lost her only son a year ago to a protracted illness, has seen her pension slashed and can’t meet loan payments on her €100,000 ($122,000) of debt. She is appealing to the Greek courts for bankruptcy protection. But with thousands of other such requests now jamming the courts, her hearing won’t happen until sometime next year.

If Parliament fails next week in its third attempt to elect a new national president, Greece will head to national elections early in the new year. In that case, Mrs. Kantere plans to vote for the radical left Syriza party, in the hope that the opposition might offer her some salvation.

She isn’t impressed by evidence that Greece seems to be slowly emerging from its crisis, with its economy returning to growth and an end in sight to strict international oversight by international creditors.

“Things cannot get any worse,” she said, fighting back tears. “Greeks are searching the garbage to find something to eat. Shops are closing one after the other. Maybe in the end it would be better if someone else governed the country.”

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Greeks Used to Years of Chaos Dismiss Samaras’s Warnings

Bloomberg
December 24, 2014

As Prime Minister Antonis Samaras’s political maneuvers to avoid early elections edge toward a dead end, his warning of turmoil risks falling on deaf ears among Greeks numbed by years of upheaval.

After losing a second vote in parliament yesterday on his candidate for a new president, Samaras needs to win over a dozen lawmakers before a final ballot on Dec. 29. Should he fail, the constitution dictates that elections must be called, with opposition party Syriza leading opinion polls.

“We’ve already been living through chaos for years now,” said Kostas Grekas, a 23-year-old computer-technology student in Athens who graduates next year. “I’d prefer there to be elections now so that Syriza gets in, just to break up the old party system and to see something different.”

Greece marked 2014 by exiting a six-year recession that cost the country about a quarter of its economic output and tripled the unemployment rate. While Samaras’s pitch is that a change of government would endanger the incipient recovery, Syriza promises to abandon austerity measures tied to the country’s international bailout.

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A Lot of Uncertainty for Greece in 2015

Bloomberg
December 23, 2014

Yale University Professor of Political Science Stathis Kalyvas discuses Greece rejecting the presidential nominee and what it means for the country with Bloomberg’s Guy Johnson on “The Pulse.”

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Greece Moves Closer to Polls as Samaras Loses 2nd President Vote

by Eleni Chrepa & Antonis Galanopoulos

Bloomberg
December 23, 2014

Prime Minister Antonis Samaras failed to win enough backing today for his nominee for president, bringing Greece a step closer to early elections.

In the second of three attempts, 168 lawmakers in Greece’s 300-seat chamber voted for Samaras’s nominee, Stavros Dimas, short of the required 200 ballots. Samaras’s calls for consensus during the weekend didn’t lure enough opposition lawmakers to add to his coalition’s 155 votes.

Attention now turns to the final attempt on Dec. 29, when Samaras needs a narrower majority of 180 votes to elect Dimas. Failure will dissolve parliament and lead to early elections. The prospect of an early vote has spooked markets, evoking memories of the financial crisis in 2012 when Greek’s euro membership was in jeopardy. Polls showed anti-austerity opposition party Syriza ahead of Samaras’s New Democracy.

“There are about five more lawmakers that could vote Dimas in the final vote on Dec. 29,” said Aristides Hatzis, an associate professor of law and economics at the University of Athens. The government could gather “a maximum of 175 votes” in the next vote, but will have great difficulty “if it insists on Dimas’s candidacy,” Hatzis said in a phone interview after the vote today.

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Greece’s radical left could kill off austerity in the EU

by Owen Jones

Guardian
December 22, 2014

Another war looms in Europe: waged not with guns and tanks, but with financial markets and EU diktats. Austerity-ravaged Greece may well be on the verge of a general election that could bring to power a government unequivocally opposed to austerity. Momentous stuff: that has not happened in the six years of cuts and falling living standards that followed the collapse of Lehman Brothers.

But if the radical leftist party Syriza does indeed triumph in a possible snap poll in the new year, there will undoubtedly be a concerted attempt to choke the experiment at birth. That matters not just for Greece, but for all of us who want a different sort of society and a break from years of austerity.

What misery has been inflicted on Greece. One in four of its people are out of work; poverty has surged from 23% before the crash to 40.5%; and research has demonstrated how key services such as health have been hammered by cuts, even as demand has risen. No wonder the country has experienced a political polarisation that has prompted comparisons with Weimar Germany. The neo-Nazi Golden Dawn – which makes other European rightist movements look like fluffy liberals – at one point attracted up to 15% in the polls; though still a menace, its support has thankfully subsided to half that.

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Samaras Confronts Peril Putting His Greek Record to Vote

Bloomberg
December 19, 2014

Prime Minister Antonis Samaras has become the stabilizing figure during the Greek financial crisis. Now he’s facing a vote that may determine whether he becomes a transformational leader or another flawed transition in the nation’s perilous politics.

Since coming to power in 2012, Samaras has shed his divisive reputation, secured Greece’s position in the euro region and held together a shaky coalition. And he’s on track to achieve what many analysts believed was impossible just two years ago: the first balanced budget in more than four decades.

“When Samaras became prime minister, most people held their breath,” said Stathis Kalyvas, professor of politics at Yale University in New Haven, Connecticut. “Expectations were universally low. Clearly, he exceeded these expectations by stabilizing the economy and putting the country back on a path toward more sustainable growth.”

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To save itself, Greece must exit the euro

by Jeremy Warner

Daily Telegraph
December 18, 2014

Of all the instabilities that concern international investors – from the plunging oil price to the collapsing rouble and the slowing Chinese economy, now fast transmogrifying into a systemic emerging market crisis – Greece is the one that bothers them least.

If you happen to be Greek, or are long of Greek bonds, the latest turn of events obviously matters a lot, but to the great bulk of the outside world it seems a contained and largely irrelevant problem, quite unlike the Greek meltdown of 2011/12 which brought the entire Eurozone close to collapse. It's yesterday's story, now eclipsed by the greater threat of mass retrenchment in emerging markets weighed low by excessive dollar debt.

Things have moved on quite a bit since back then, or at least, that’s what eurozone leaders have convinced themselves of; the banking system is stronger, and mechanisms are in place to prevent wider contagion from a Greek default or exit, including, crucially, the bond buying backstop of the European Central Bank.

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Tsipras vows to break Greece's 'bad spell'

Reuters
December 18, 2014

Greece's radical leftist Syriza party will cancel austerity and ask Europe to erase a big chunk of Greek debt to free the country from the dark spell it has fallen under, leader Alexis Tsipras told Reuters on Thursday.

In an interview at his party headquarters in a gritty Athens district, Tsipras sought to reassure markets wary of Syriza sweeping into power, saying he was committed to keeping Greece in the euro and keeping the budget balanced before debt costs.

"The fear-mongering of 2012 and the fear today that if Syriza comes to power in Greece Europe will be destroyed, in reality works as a self-fulfilling prophecy," said Tsipras.

"A Syriza victory will break the bad spell and liberate markets. It will create a feeling of security."

Fears among investors that Greece is heading for an early national election that will bring Syriza to power have sent Greek stocks and bonds crashing in recent weeks. Markets have been spooked by Syriza's hard line on demanding a debt write-off and plans to cancel an EU/IMF bailout that is keeping Greece afloat.

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EU's Greek Drama Needs a Final Act

Bloomberg
Editorial
December 18, 2014

Judging from Wednesday's vote in the Greek parliament, Prime Minister Antonis Samaras may not get the mandate he wants to keep economic austerity measures in place and avoid defaulting on the country's debt. His would be the responsible path, but it's easy enough to see why Greeks wouldn't want to follow it.

The dispute is haunting international investors again because the European Union in general, and Germany in particular, refuses to write off any part of Greece's sovereign debt. Yet, as most economists acknowledge, the country can never emerge from under its current debt pile -- now close to 180 percent of gross domestic product. And the prospect of endless years of austerity spent in the attempt is political poison.

Samaras brought forward Wednesday's vote for a new president, the first of three, as a vote of confidence. He is essentially daring members of parliament to reject his candidate, Stavros Dimas, because that would force new parliamentary elections -- elections that the anti-austerity, neo-Marxist Syriza coalition might win. Judging by this first vote, in which Dimas secured just 160 votes, it's going to be an uphill struggle. To win in the third round later this month, Dimas will need 180 votes.

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EU's Greek Drama Needs a Final Act

Bloomberg
Editorial
December 18, 2014

Judging from Wednesday's vote in the Greek parliament, Prime Minister Antonis Samaras may not get the mandate he wants to keep economic austerity measures in place and avoid defaulting on the country's debt. His would be the responsible path, but it's easy enough to see why Greeks wouldn't want to follow it.

The dispute is haunting international investors again because the European Union in general, and Germany in particular, refuses to write off any part of Greece's sovereign debt. Yet, as most economists acknowledge, the country can never emerge from under its current debt pile -- now close to 180 percent of gross domestic product. And the prospect of endless years of austerity spent in the attempt is political poison.

Samaras brought forward Wednesday's vote for a new president, the first of three, as a vote of confidence. He is essentially daring members of parliament to reject his candidate, Stavros Dimas, because that would force new parliamentary elections -- elections that the anti-austerity, neo-Marxist Syriza coalition might win. Judging by this first vote, in which Dimas secured just 160 votes, it's going to be an uphill struggle. To win in the third round later this month, Dimas will need 180 votes.

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Greek premier prepared European ground before vote gamble

Reuters
December 17, 2014

Prime Minister Antonis Samaras has bet on Greece's future with an early vote for the presidency. But in contrast to a recent predecessor, he made sure before dropping the bombshell that Berlin and Brussels wouldn't stand in the way.

Samaras's decision last week to bring the three-stage parliamentary vote forward to this month from February took the Greek establishment and financial markets by surprise.

But a select few knew it was coming, among them German Finance Minister Wolfgang Schaeuble. With Berlin playing a decisive role in European aid for Greece, Samaras and Schaeuble spoke repeatedly by telephone in the days before the early vote was announced on Dec. 8, according to a euro zone official with direct knowledge of the talks.

They discussed details of Greece's international bailout, which Samaras wants to pull out of a year ahead of schedule. They also talked about bringing forward the vote, this person said, even though the conservative premier has yet to secure a majority of lawmakers for the government's candidate.

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Greek Markets Suggest Government May Fall

by Mark Gilbert

Bloomberg
December 17, 2014

Greek lawmakers will vote today on whether to back Prime Minister Antonis Samaras's choice for a new head of state. The collective wisdom of financial markets suggests his gambit may fail, leading to elections early next year that could result in the nation defaulting on its debts.

Samaras needs the assent of 200 out of 300 parliamentarians, though he has three chances to muster that support between now and Dec. 29. Observers reckon he needs more than 170 in the first attempt to be on track for a win; the governing coalition controls 155 of the votes. Failure may usher opposition party Syriza into power on a platform of less economic austerity and a renegotiation of Greece's debts.

The Greek bond market has been in a funk ever since early last week when Samaras announced the vote. With three-year yields above 10-year levels, bondholders are signaling their discomfort about the near-term outlook for the nation's creditworthiness and its willingness to meet its obligations:

The stock market is similarly dismayed at the prospect of a change of government, with Greek stocks underperforming their European counterparts:

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Greek Lawmakers Gird for High-Stakes Vote

by Stelios Bouras & Alkman Granitsas

Wall Street Journal
December 17, 2014

Greek lawmakers are scheduled to hold a first vote late Wednesday on the country’s next head of state, a largely ceremonial position but one that has become a flash point in Greece’s contentious politics and could determine whether the country goes to early national elections.

Few expect the government to garner the supermajority it needs to elect its candidate, former European commissioner Stavros Dimas, in the first round, and two more votes are likely to follow. But the first round, said analysts and government officials, will show whether the government’s gambit is gaining traction among lawmakers or is heading toward defeat.

The government—a coalition of the conservative New Democracy and socialist Pasok parties—holds just 155 seats in the 300-seat Parliament. It will have to rely on votes of some two dozen independent lawmakers, as well as renegade deputies in two smaller parties to reach the 180-vote threshold in the final round, tentatively scheduled for Dec. 29.

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Greece Revisits the Panic

Wall Street Journal
Editorial
December 14, 2014

Stock markets took a tumble last week as the announcement of a snap presidential election in Athens triggered fears about how lasting Greece’s reform-and-recovery drive will be. This panic about democracy is instructive.

The vote for the ceremonial role of president, which will likely take three rounds of balloting in the parliament over the next few weeks, has become a test of confidence in Prime Minister Antonis Samaras. He will be forced to call a snap parliamentary election next month if he can’t secure 180 votes in the 300-member body for his preferred candidate by the third round. He needs support from 25 independent members to hit that threshold, and he’s not certain to get it. If he fails, voters will elect a new parliament at the end of January.

Mr. Samaras’s decision to call the presidential election that threatens his government appears to be a gambit to neutralize the increasingly popular far-left Syriza party, which promises to undo painful reforms and force creditors to take bigger haircuts on Greek debt. With negotiations for Greece’s exit from its bailout looming, Mr. Samaras seems to hope voters will return his unpopular government to power rather than risk further chaos by handing Syriza power for the exit talks.

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Mad as Hellas

by Paul Krugman

New York Times
December 11, 2014

The Greek fiscal crisis erupted five years ago, and its side effects continue to inflict immense damage on Europe and the world. But I’m not talking about the side effects you may have in mind — spillovers from Greece’s Great Depression-level slump, or financial contagion to other debtors. No, the truly disastrous effect of the Greek crisis was the way it distorted economic policy, as supposedly serious people around the world rushed to learn the wrong lessons.

Now Greece appears to be in crisis again. Will we learn the right lessons this time?

What happened last time, you may recall, was the exploitation of Greece’s woes to change the economic subject. Suddenly, we were supposed to obsess over budget deficits, even if borrowing costs were at historic lows, and slash government spending, even in the face of mass unemployment. Because if we didn’t, you see, we could turn into Greece any day now. “Greece stands as a warning of what happens to countries that lose their credibility,” intoned David Cameron, Britain’s prime minister, as he announced austerity policies in 2010. “We are on the same path as Greece,” declared Representative Paul Ryan, who was soon to become the chairman of the House Budget Committee, that same year.

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Ο Αριστείδης Χατζής για τις πολιτικές εξελίξεις

Συνέντευξη του Αριστείδη Χατζή στη Φούλη Δημητρακοπούλου (ΝΕΡΙΤ Θεσσαλονίκης)
11 Δεκεμβρίου 2014

How to Buy a Greek Island

by Stelios Bouras & Nektaria Stammouli

Wall Street Journal
December 11, 2014

It’s the ultimate dream property of the superrich: your own Greek island, drenched in sunshine and surrounded by turquoise water.

Traditionally, these islands have rarely come up for sale, staying in the same families from one generation to the next. But Greek’s private-island property market is perking up, bolstered by growing interest from foreign investors, a drop in prices and changes to Greek tax laws. Some 20 privately owned Greek islands are currently up for sale.

Notable new island-owners include Ekaterina Rybolovleva, the 25-year-old daughter of Russian billionaire Dmitry Rybolovlev. Early last year, a company belonging to a trust affiliated with Ms. Rybolovleva bought the Greek isle of Skorpios from Athina Onassis Roussel, the granddaughter of Greek shipping tycoon Aristotle Onassis. (The island was the site, 45 years earlier, of the wedding of the magnate and former first lady Jacqueline Kennedy.) The sale price was reportedly £100 million, or $158 million; a representative for Ms. Rybolovleva confirmed the sale but wouldn’t comment on the price.

“After Skorpios was sold, and especially during the past year, there has been an intense interest in the islands’ market,” says Alexandros Moulas, an agent for real-estate firm Savills . “An intermediate usually gets in touch with us and the name of the actual investor is kept as a closely guarded secret.”

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Greek stocks and bonds in sharp sell-off

Financial Times
December 11, 2014

Greek stocks and bonds suffered another sharp sell-off on Thursday amid mounting fears about the country’s future within the eurozone and mounting political uncertainty.

Greece’s stock market declined 7 per cent following the worst one day fall since the late 1980s this week. Benchmark 10-year government borrowing costs rose 50 basis points to yield 8.79 per cent.

The decline means the Athens bourse has shed nearly a fifth of its value this week after the announcement by Antonis Samaras, prime minister, of a snap presidential election later this month. If he fails to win sufficient support for his candidate, an early general election could follow which investors fear will bring to power the radical left Syriza party that has campaigned on an anti-austerity platform.

“Further volatility cannot be ruled out given the event risk over December,” said Peter Goves, an analyst at Citi.

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'Grexit' threat could complicate ECB quantitative easing

by James Saft

Reuters
December 11, 2014

The return of the idea of a Greek euro exit, as boogeyman or genuine threat, comes at a particularly difficult time, dangerously complicating the already fraught advent of full-scale QE in the euro zone.

A parliamentary vote, set to begin next week, to replace the Greek president may trigger general elections in the new year, elections which the anti-bailout party Syriza could well win.

"We shed blood to take the word 'Grexit' away from the mouth of foreigners, and Syriza is bringing this word back to their mouths," Prime Minister Antonis Samaras said on Thursday, using once more the highly emotive term for a Greek parting of ways with the euro project.

The very idea, much less its invocation by the prime minister, panics Greek markets, which have seen equities lose more than a fifth of their value in three days and a spike in 10-year government bond yields above 9 percent.

There are very good reasons for this, though much has changed since the height of Greece’s crisis.

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Samaras’s gamble

Economist
December 13, 2014

A Greek presidential election is not supposed to make headlines. The ruling party’s candidate, typically a low-key retired politician, normally wins the required three-fifths majority after a three-round vote in parliament. In the 40 years since Greece replaced its monarchy with a republic led by a figurehead president, no big political upset has occurred. This time it could be different.

Antonis Samaras (pictured), the centre-right prime minister, has called a snap presidential election for December 17th, two months before Karolos Papoulias, the 85-year-old incumbent, steps down. This is at best a risky gamble. Sensing that political instability might rekindle the euro crisis, financial markets panicked. Prices on the Athens stockmarket plunged by almost 13% the day after the presidential vote was announced; yields on Greek ten-year bonds soared above 8% (see chart).

Mr Samaras said he was bringing the presidential vote forward to restore political stability, which he claimed was being undermined by persistent demands from the far-left Syriza party, led by Alexis Tsipras, a radical populist, for an early general election. Since it came first in the European elections in May, Syriza has kept a strong lead over Mr Samaras’s New Democracy (ND) party in the opinion polls. Yet if Mr Samaras’s candidate for the presidency, Stavros Dimas, a former European environment commissioner, fails to win 180 out of 300 votes in the final round, Mr Tsipras will get his way, as an early general election must then be held.

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Για γέλια και για κλάματα

του Αριστείδη Ν. Χατζή

Τα Νέα
10 Δεκεμβρίου 2014

Από το πρωί της περασμένης Παρασκευής και για τέσσερις ημέρες το Πανεπιστήμιο Αθηνών αποκόπηκε από τον κόσμο. Καμία ηλεκτρονική υπηρεσία δεν λειτουργούσε, δεν είχαμε πρόσβαση στην ηλεκτρονική αλληλογραφία και φυσικά οι φοιτήτριες και οι φοιτητές μας δεν μπορούσαν να επικοινωνήσουν μαζί μας, να παραδώσουν εργασίες, να δουν τους βαθμούς τους ή να έχουν πρόσβαση στο εκπαιδευτικό υλικό. Η διακοπή αυτή δεν οφείλεται σε βλάβη αλλά στη βίαιη κατάληψη του Κέντρου Δικτύου από μια ομάδα τραμπούκων, οι οποίοι μάλιστα απειλούσαν να καταστρέψουν τον εξοπλισμό αν επιχειρούσε κανείς να τους βγάλει έξω από τον χώρο που κατέλαβαν παράνομα. Ο λόγος που αναγκάστηκαν να διακόψουν την κατάληψη ήταν για να αποφύγουν σοβαρές ποινικές ευθύνες σε περίπτωση κάποιου «ατυχήματος» σε ένα από τα πανεπιστημιακά νοσοκομεία – που βέβαια κι αυτά αποκόπηκαν από το Διαδίκτυο. Όμως μας «υποσχέθηκαν» ότι η πρόσβαση που έχουμε από την Τρίτη το πρωί είναι προσωρινή. Θα επανέλθουν…

Ασφαλώς όλα αυτά ακούγονται εξωφρενικά στους φυσιολογικούς ανθρώπους και τερατώδη στους συναδέλφους μας στο εξωτερικό. Όταν χρησιμοποίησα εναλλακτική διεύθυνση για να έρθω σε επαφή με τους τελευταίους, μου έκαναν μερικές απλές, αφελείς ερωτήσεις: «Γιατί δεν επενέβη ο εισαγγελέας; Η παράνομη βία δεν είναι αυτόφωρο έγκλημα; Το πανεπιστημιακό άσυλο δεν προστατεύει την ελευθερία επικοινωνίας και την ακαδημαϊκή ελευθερία;»

Η πανεπιστημιακή κοινότητα τι έκανε; Με λίγες εξαιρέσεις, τίποτα απολύτως. Πάσχουμε άλλωστε από βαριά μορφή μιθριδατισμού. Έχουμε συνηθίσει ακόμα και τις πιο ακραίες πράξεις βίας, αυθαιρεσίας και αυταρχισμού. Έχουμε μάθει να ζούμε μέσα σε ένα άθλιο περιβάλλον, να εργαζόμαστε με μισθούς εξευτελιστικούς και να σκύβουμε το κεφάλι σε κάθε τραμπούκο. Μην περιμένετε πολλά από εμάς.

Οι φοιτήτριες και οι φοιτητές; Την προηγούμενη εβδομάδα κατάφεραν να σπάσουν την παράνομη κατάληψη της Νομικής. Στη συνέλευση του φοιτητικού συλλόγου ανεξάρτητοι φοιτητές/τριες πέρασαν ένα δικό τους ψήφισμα υπέρ των ανοικτών σχολών απομονώνοντας τις κομματικές παρατάξεις. Αυτό δεν εμπόδισε τους τραμπούκους να καταλάβουν τη σχολή την Τρίτη και να την κρατούν κλειστή με τη βία. Όμως και πάλι φοιτήτριες και φοιτητές έκαναν ό,τι μπορούσαν για να ανοίξει, δυστυχώς χωρίς αποτέλεσμα.

Ζούμε σε ένα κράτος το οποίο αδιαφορεί για την παιδεία, ιδιαίτερα την ανώτατη, εκτός αν μπορεί να αποκομίσει πολιτικά οφέλη. Με ένα υπουργείο Παιδείας που κουρεύει ερευνητικά προγράμματα για να αναδιανείμει το ποσό σε δραστηριότητες περισσότερο επικερδείς πολιτικά. Το πανεπιστήμιο έχει γίνει ένας τεράστιος άθλιος σκουπιδότοπος, χωρίς φύλαξη, γεμάτος άσχημα graffiti, αφίσες και ιπτάμενα κουρέλια.

Η μόνη παρηγοριά είναι το μάθημα, η επαφή με τις φοιτήτριες και τους φοιτητές. Και η έρευνα, η ανάπηρη έστω επαφή μας με τον κόσμο της επιστήμης. Μας τα αφαιρούν κι αυτά. Κάθε τραμπούκος μπορεί να μας απαγορεύσει να κάνουμε μάθημα, κάθε θρασύδειλος νταής μπορεί να μας εμποδίσει να επικοινωνούμε ηλεκτρονικά με τον έξω κόσμο.

Αναρωτιέμαι λοιπόν…Τι μας απομένει; Δεν μπορούμε να προστατεύσουμε τους εαυτούς μας, δεν μπορούμε να προστατεύσουμε τους φοιτητές μας, δεν μπορούμε να προστατεύσουμε την εκπαιδευτική διαδικασία. Απουσιάζουν ακόμα και οι βασικές προϋποθέσεις στοιχειώδους λειτουργίας. Ποιον κοροϊδεύουμε παριστάνοντας ότι αυτό είναι πανεπιστήμιο;

* Ο Αριστείδης Χατζής είναι αναπληρωτής καθηγητής Φιλοσοφίας Δικαίου και Θεωρίας Θεσμών στο Πανεπιστήμιο Αθηνών.

Εδώ θα βρείτε το άρθρο σε PDF (όπως δημοσιεύθηκε στα Νέα)

Εδώ θα βρείτε το άρθρο στην ιστοσελίδα των Νέων

Εδώ θα βρείτε ένα πρόσφατο σχετικό κείμενό μου για τη βία στα πανεπιστήμια και εδώ παλαιότερα κείμενά μου για την κατάσταση στην ανώτατη παιδεία

Samaras Appeals to Lawmakers’ Principles and Pocketbooks

Bloomberg
December 9, 2014

With his choice for the presidency, Prime Minister Antonis Samaras made an appeal to Greek conservatives -- and to the self interest of opposition lawmakers.

Nominating Stavros Dimas, a 73-year-old former European commissioner, offers conservatives in the 300-seat parliament a candidate in line with their values, and gives Samaras a chance of staying in office.

It also gives those members concerned that the rise of anti-austerity Syriza party could cost them their jobs a reason to side with the government, said Aristides Hatzis, an associate professor of law and economics at the University of Athens. Samaras will have to dissolve parliament unless he can muster the support of 180 lawmakers for Dimas.

“Many of these guys were elected in 2012 for the first time,” Hatzis said by phone yesterday. “And it will probably be the last time.”

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Tsipras May Become Next Greek Leader, Mixing Mao With Bond Yield

Bloomberg
December 8, 2014

As Alexis Tsipras moves closer to taking control of Europe’s most indebted country, he’s trying to convince bond investors they have nothing to fear.

The 40-year-old leader of Coalition of the Radical Left, better known as Syriza, alarmed an entire continent at the height of the euro-area crisis in 2012, when his party narrowly lost the second Greek election that year. He campaigned then on a pledge to tear up the country’s bailout agreement, risking a euro exit. Now he’s pledging fiscal prudence.

“We don’t want to return to deficits,” Tsipras told the Greek parliament in Athens during a debate last night. “We don’t want new borrowed money.”

Tsipras is trying to convince voters exhausted by five years of austerity that he can walk a tightrope between rolling back spending cuts and balancing the budget. While economists question the math underlying his pledge, some investors say the prospect of a Tspiras government isn’t reason to panic just yet.

“If Syriza wins the elections then there might be maybe a short-term repricing in Greek assets, but I don’t think it’s going to be a long-lived weakness,” said Nicola Marinelli, who helps manage 110 million euros ($135 million) of assets at Pentalpha Capital Ltd in London. “It might even be an opportunity to buy.”

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Greece Turns Triumph Into Tragedy

by Simon Nixon

Wall Street Journal
December 7, 2014

Greece’s latest drama has the potential to turn into a tragedy. Six months ago, the country seemed to be past the worst and there was widespread optimism among policy makers and the markets that the overhauls had laid the foundations for an investment- and export-led recovery.

Foreign investors had snapped up Greece’s first government-bond issue since the start of the eurozone debt crisis and had poured fresh capital into the banking system.

The long-stalled privatization program was attracting serious expressions of interest from global companies and hedge funds, and private-equity groups were on the hunt for bargains.

The mood today is rather different. If anything, the economy has outperformed expectations, growing 0.7% year-to-year in the third quarter, the fastest growth of any eurozone member, boosted by tourism.

Next year, Athens expects growth of close to 3%. Unemployment is finally falling and the country is delivering both a primary-budget and current-account surplus.

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Greek radical left spooks global bond investors

Financial Times
December 7, 2014

Investors are increasingly worried about the outcome of Greece’s forthcoming presidential election, which could enable radical leftwing party Syriza to take power in March.

Senior Syriza politicians visited London two weeks ago to present their economic programme to a number of large fund houses and banks, but the meetings have sparked anxiety among investors.

A leaked memo from Joerg Sponer, an analyst at Capital Group, the ninth-largest fund house globally, with $1.4tn of assets, described the programme as “worse than communism” and “total chaos”. “Everybody coming out of the meeting wants to sell everything in Greece,” he said.

Syriza denied that Mr Sponer was at any of the meetings it held, but acknowledged other Capital Group analysts were present. Capital Group said the memo did not represent its universal house view.

Since the Syriza meetings took place, a flurry of Greek bankers and brokers have travelled to London to try and reassure clients. The Syriza road-trip “has made some investors quite nervous”, one of the bankers said.

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Oil Price Plunge Lends Unexpected Hand to Southern Europe

Bloomberg
December 3, 2014

The plunging oil price is giving an unexpected lift to Europe’s crisis-battered southern periphery as decreasing fuel costs help spur demand.

Spain, Europe’s fourth-largest economy, could add as much as 1 percent to annual growth with oil prices between $80-90 a barrel, the government said. Italy, which is in its fourth year of recession, stands to boost GDP 0.3 percentage points with a sustained $10 oil price drop, according to BNP Paribas SA.

“There’s no doubt lower oil prices will act as a stimulus to growth in the region,” Frederik Ducrozet, a Paris-based economist at Credit Agricole, said by phone. “Greece, Spain, Portugal and Italy would be clear beneficiaries.”

The region’s crisis-ravaged southern arc is looking forward to an unexpected boon from the oil drop after years of contraction left record debt levels and unemployment that confound economic recovery. As importers of oil, the countries gain economically from the plummeting price through lower energy costs and increased buying power for consumers.

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The Greek Patient: Europe Debates Third Bailout Package for Athens

Spiegel
December 1, 2014

It's no accident that "pathos" is a Greek word. Greek Prime Minister Antonis Samaras, at least, is a politician who is fond of sprinkling his speeches with the kind of emotional appeal that Aristotle long ago identified as an effective stylistic device.

"The era of bailout packages is ending," Samaras promised in September during an appearance in Thessaloniki. "Greece is now welcoming the new Greece."

Samaras knew the line would guarantee him applause from his audience, but the promise also came a bit prematurely. Following the announcement, Greece got a small taste of what it might mean were Greece were released from the oversight of the troika, comprised of the European Commission, the European Central Bank (ECB) and the International Monetary Fund. The more often Samaras spoke of a "clean solution," the more yields rose on long-term Greek government bonds. At the beginning of September, the rates had been 5.8 percent, but they soon climbed to almost 9 percent.

It was the financial markets' way of hinting that it is still too early to grant Greece full fiscal independence.

One high-ranking EU official compared the situation to a patient who has survived intensive care but wants to leave the hospital early. A relapse is certain and the subsequent care will be much more involved than if the patient had stayed in the hospital long enough for full recovery. Greece's second bailout package officially ends in a month's time, but it is already certain that the country will require additional funding from its EU partners.

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Greece’s Creditors Likely to Extend Its Bailout After Talks Fail

Wall Street Journal
November 26, 2014

Greece’s international creditors are looking at extending the country’s bailout program by up to six months, two eurozone officials said Wednesday after two days of marathon negotiations with the country’s officials here failed to reach an agreement.

The country’s so-called troika of lenders—the European Union, the European Central Bank and the International Monetary Fund—is leaning toward a six-month extension of Greece’s current program, one eurozone official said.

The IMF and Germany, often aligned when it comes to the Greek bailout program, back the idea, a second official said.

The talks in the French capital, which began Tuesday afternoon and continued almost nonstop for 24 hours, were aimed at wrapping up the final review of the country’s austerity and reform program. They come as Greece fast approaches a year-end deadline to hammer out a new financing deal with creditors.

The financial markets have looked negatively on the possibility of Greece’s early exit from the program. In addition, Greek banks could be cut off from the European Central Bank’s cash lending if Greece is not under internationally approved supervision.

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Greece Submits Budget With Troika Talks Still at Impasse

by Marcus Bensasson and Christos Ziotis

Bloomberg
November 21, 2014

Greece submitted its 2015 budget to parliament without prior sign-off from its international creditors as talks with them remained stalled.

The plan sees the government posting a budget surplus before interest payments of 3 percent of gross domestic product next year, or 5.6 billion euros ($7 billion) compared with a forecast of 2.9 percent of GDP in an earlier draft of the budget last month, Alternate Finance Minister Christos Staikouras told reporters in Athens today. Hours earlier, talks between the government and officials representing the European Commission, European Central Bank and International Monetary Fund, known as the troika, ended without an agreement over those forecasts.

“The risk of a complete breakdown is quite high,” said Aristides Hatzis, an associate professor of law and economics at the University of Athens. “This is a pre-electoral message. There’s a competition going on between the government and Syriza over who can unshackle Greece from the bailout accord the quickest.”

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Give Greece a Chance

Bloomberg
Editorial
November 21, 2014

Greece's creditors are testing the country's endurance -- again. If they keep pressing, they could split the euro area apart, which would be a disaster for them as much as for Greece. They need to stop insisting on the impossible, and find a way to relieve the country's debts.

The European Commission, the European Central Bank and the International Monetary Fund have told the government of Prime Minister Antonis Samaras to cut the country's debt burden, the biggest in the euro area, by reducing public spending even further. In return, they propose a last injection of bailout money and an emergency credit line.

The offer is toxic because further efforts to reduce debt through fiscal tightening are almost certain to fail. And that's assuming they don't plunge the country into political instability, as they well might. Polls suggest that the radical left-wing Syriza party, led by Alexis Tsipras, is in a strong position to replace Samaras's moderates in elections next year. (A few months back, Syriza rode a wave of anti-Europe sentiment to victory in elections to the European Parliament.)

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