Friday, 31 July 2015

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

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

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

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

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

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

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

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

Thursday, 16 July 2015

Merkel 'Gambling Away' Germany's Reputation over Greece, Says Habermas

German chancellor Angela Merkel has been accused of
'punishing' Greece
THE GUARDIAN: Exclusive: Intellectual figurehead of European integration says efforts of previous generations put at risk by Angela Merkel’s hardline stance on Greece

Jürgen Habermas, one of the intellectual figureheads of European integration, has launched a withering attack on the German chancellor, Angela Merkel, accusing her of “gambling away” the efforts of previous generations to rebuild the country’s postwar reputation with her hardline stance on Greece.

Speaking about the bailout deal for the first time since it was presented on Monday, the philosopher and sociologist said the German chancellor had effectively carried out “an act of punishment” against the leftwing government of Alexis Tsipras.

“I fear that the German government, including its social democratic faction, have gambled away in one night all the political capital that a better Germany had accumulated in half a century,” he told the Guardian. Previous German governments, he said, had displayed “greater political sensitivity and a post-national mentality”.

Habermas, widely considered one of the most influential contemporary European intellectuals, said that by threatening Greece with an exit from the eurozone over the course of the negotiations, Germany had “unashamedly revealed itself as Europe’s chief disciplinarian and for the first time openly made a claim for German hegemony in Europe.” » | Philip Oltermann | Thursday, July 16, 2015

Monday, 13 July 2015

Greek Rescue Deal: Political Tumult Beckons as Alexis Tsipras Returns Home

THE GUARDIAN: Some members of Greek prime minister’s Syriza party have already denounced bailout accord as harbinger of further catastrophe

For the Greek prime minister, Alexis Tsipras, the hard work begins now. The rescue deal hammered out in Brussels may have brought relief to Athens but its battle-hardened government knows that it also comes at enormous cost.

Within minutes of Tsipras giving his “victory” speech, some in his Syriza party were denouncing the bailout accord – the third emergency funding programme for the debt-stricken country since 2010 – as the harbinger of further catastrophe.

“After 17 hours of ‘negotiations’ the leaders of eurozone member states reached an agreement that was humiliating for Greece and the Greek people,” declared the dissenters, coalesced around the energy minister Panagiotis Lafazanis.

Political tumult beckons. Tsipras returns to Athens with a deal so excoriating that not even his closest allies on Monday appeared willing to defend it. » | Helena Smith in Athens | Monday, July 13, 2015

Tuesday, 7 July 2015

Eurozone Tells Greece Not to Expect Debt Relief in Near Future

A tattered EU flag flutters in front of the Parthenon in Athens.
THE GUARDIAN: Hopes fade for quick solution to thwart Grexit as Eurogroup finance chiefs show incredulity as new Greek finance minister arrives without detailed proposals

The Greek government has been told by its eurozone partners not to expect debt relief any time soon, amid fading hopes of decisive action to stop the country tumbling out of the currency union.

Eurozone finance ministers arriving for emergency talks in Brussels made it clear they were waiting on Athens to sign up to further reforms and were in no hurry to discuss debt relief.

But there was incredulity when it emerged Greece’s new finance minister Euclid Tsakalotos had not come armed with detailed proposals. » | Jennifer Rankin in Brussels | Tuesday, July 7, 2015

Friday, 3 July 2015

Greek Economy Close to Collapse as Food and Medicine Run Short

Supporters of the yes campaign attend a rally in Athens on Friday.
THE GUARDIAN: Alexis Tsipras urges people to vote no in Sunday’s referendum as capital controls bite and vital tourism industry sees tens of thousands cancel holidays in Greece

Greece’s economy is on the brink of collapse after the capital controls imposed ahead of Sunday’s referendum left the country with shortages of food and drugs, the tourist industry facing a wave of cancellations and banks with barely enough money to survive the weekend.

Banks said they had a €1bn cash buffer to see them through the weekend – equal to just €90 (£64) a head for the 11 million-strong population – and would require immediate help from the European Central Bank on Monday whatever the result of the referendum, in which the two sides are running neck and neck.

Alexis Tsipras, Greece’s prime minister, was fighting for his political life on Friday night, using a rally to say that a no vote would enable him to negotiate a reform-for-debt-relief deal with the country’s creditors.

The survival of the Syriza coalition, formed just over five months ago to repudiate five years of austerity programmes, was in doubt as Greece started to suffer shortages of basic provisions, including the sale of vital drugs in pharmacies nationwide.

Food staples, such as sugar and flour, were also fast running out on Friday as consumers started to feel the effect of the restrictions. » | Helena Smith in Athens and Larry Elliott in London | Friday, July 3, 2015

Bank of England to Cut Amount of Personal Savings Protected by £10,000

THE GUARDIAN: It has been forced to reduce figure covered when banks collapse from £85,000 to £75,000 to bring UK in line with rest of the EU

The Bank of England has been forced to make a £10,000 cut in the amount of individual savings protected when banks go bust because of the slump in the euro over the past five years.

The fall means that £75,000 of savings will now be covered by the guarantee scheme, rather than £85,000 – a move that may surprise millions of savers.

The Bank said it had to reduce the cover to bring the UK in line with the rest of the EU, which has set a threshold of saver protection at €100,000 (£71,000). That measure was introduced after the 2008 banking crisis to prevent savers being enticed to move money across borders to chase the highest level of protection.

The £85,000 limit was set in 2010 and has to be reviewed every five years to keep it in line with the EU’s stipulation. Changes in the value of the euro since then mean the Bank has to alter the conversion rate used to translate euros into pounds at the Financial Services Compensation Scheme (FSCS).

The new limit kicks in immediately, although the Treasury is putting legislation to maintain the £85,000 figure until the end of the year. The Bank has also launched a consultation to try to tackle the consequences for individuals locked in to long-term savings products with the aim of allowing savers to move the £10,000 that will no longer be covered without having to pay a fee.

About 3% of the population have savings above the £85,000 threshold. » | Jill Treanor | Friday, July 3, 2015

Thursday, 2 July 2015

No Talks on Greek Bailout before Referendum - Angela Merkel

German Chancellor Angela Merkel says that whilst the door for talks with Greece remains open, no negotiations on a bailout are possible before the referendum on Sunday 5th July.