Greek Crisis Talks Collapse in Acrimony as Syriza Defies EMU

THE DAILY TELEGRAPH: 'The only way to solve Greece is to treat us like equals; not a debt colony,' says Greek finance minister

Greece is on a collision course with the eurozone’s creditor powers after emergency talks ended in acrimony on Monday night, triggering the most serious political crisis since the launch of the euro.

The Leftist Syriza government reacted with fury to eurozone demands that it must stick to the country’s discredited austerity plan, describing the draft text as “absurd and unacceptable”.

Yanis Varoufakis, the Greek finance minister, said Eurogroup finance ministers had ignored a deal already agreed with the European Commission for a four-month delay and a “new contract for growth”, returning instead to old demands. "The only way to solve Greece is to treat us like equals; not a debt colony,” he said, predicting that EU authorities would soon have to withdraw their latest “ultimatum”.

The talks were halted after four hours of stormy exchanges, risking a traumatic showdown that could precipitate the biggest default in world history and force Greece out of the euro by the end of the month. » | Ambrose Evans-Pritchard, International Business Editor | Monday, February 16, 2015

Legal Noose Tightens on Europe's Monetary Union
TELEGRAPH – BLOGS – AMBROSE EVANS-PRITCHARD: The plot continues to thicken at Germany’s constitutional court, a body with power of life or death over Europe’s monetary union.

Contrary to general belief, Germany’s eurosceptic professors have not abandoned their legal efforts to block the EU rescues for European banks exposed to Greek debt, and since May 7 for banks exposed to debt from Spain, Portugal, and Ireland as well.

Should they succeed, of course, the eurozone risks disintegration within days, and perhaps hours. I am not sure that investors in New York, London, Tokyo, Beijing, or indeed Frankfurt quite understand this.

There are now four cases at the court – or Verfassungsgericht – arguing that these disguised bank bail-outs breach multiple clauses of EU treaty law, and therefore breach Germany’s supreme and sovereign Basic Law.

A quintet of professors – Wilhelm Hankel, Wilhelm Nölling, Joachim Starbatty, Karl Albrecht Schachtschneider, and Dieter Spethmann (ex Thyssen CEO) – have just broadened their complaint over the Greek part of the bank rescue to include the new €440bn Stability Facility, which breaks EU law at every turn.

It also covers the European Central Bank’s mass purchase of Greek, Spanish, Portuguese, and Irish bonds from private banks. This enables investors who bought these bonds during the credit bubble in order to boost yield – just as they bought US subprime CDOs to boost yield – to shift the consequences of their own misjudgements onto taxpayers (Hedge funds were already “long” Club Med debt, of course, when the ECB stepped in so they simply make a speculative gain from taxpayers). >>> Ambrose Evans-Pritchard | Thursday, July 08, 2010

Breakup of Single Currency 'Would Plunge Eurozone into Deep Recession'
THE GUARDIAN: Knock-on effect on global economy would dwarf aftermath of Lehman Brothers collapse, analysts warn

Inflation in Spain and Portugal could soar towards double digits while Germany would suffer deflationary shock, ING researchers said. Photograph: The Guardian
Countries in the eurozone would plunge into a deep recession if European monetary union (EMU) was torn apart, with a knock-on effect on the global economy that would dwarf that of the Lehman Brothers collapse, analysts warned today.

In a bleak assessment of what would happen if EMU – intended to be irreversible – collapsed, experts at Dutch bank ING calculated that output in the first year alone would fall between 5% and 9% across various member states, while their new national currencies would fall by 50%.

Inflation in countries such as Spain and Portugal could soar towards double digits while core countries such as Germany would be suffering the opposite impact – a deflationary shock.

The assessment by Mark Cliffe, global head of financial markets research at ING, comes as the market waits for details about the methodology of stress tests applied to European banks to assess whether they can withstand a calamity in the markets. Read on and comment >>> Jill Treanor | Wednesday, July 07, 2010

The Euro Mutiny Begins
The Colosseum in Rome, Italy, where economists have openly questioned the euro's future. Photo: Google Images
THE TELEGRAPH: The rebellion against the 1930s fiscal and monetary policies of the Euro-complex is gathering pace.

Il Sole has published a letter by 100 Italian economists warning that the austerity strategy imposed by Brussels/Frankfurt risks tipping Europe into a self-feeding downward spiral. Far from holding the eurozone together, it will cause weaker countries to be catapulted out of EMU. Others will leave in order to restore sovereign control over their central banks and unemployment policies.

At worst it will blow the EU apart, leading to the very acrimony that the European Project was supposed to prevent.

For readers of Italian, it’s here.

While I don’t share the big-state Left-Keynesian perspective of these professors — nor their implicit hostility to the free market — I do agree with much of their overall analysis. >>> Ambrose Evans-Pritchard | Wednesday, June 14, 2010

Lettera di 100 economisti contro la manovra e la linea (europea) dell'austerità >>> mercoledi 16 giugno 2010

Ambrose Evans Pritchard’s Viewpoint: Europe's Fiscal Fascism Brings British Withdrawal Ever Closer
TELEGRAPH BLOGS: Just when you thought the EU could not go any further down the road towards authoritarian excess, it gets worse.

The European Commission is calling for EU powers to vet budgets of the 27 member states before the draft laws have been presented to the House of Commons, the Tweede Kamer, the Folketing, the Bundestag, the Assemblee Nationale, or other national parliaments. It applies to Britain even though we are not in EMU.

Fonctionnaires and EU finance ministers will pass judgement on the British (or Dutch, or Danish, or French) budgets before the elected bodies of these ancient and sovereign nations have seen the proposals. Did we not we not fight the English Civil War and kill a king over such a prerogative?

Yet again we are discovering the trick played on our democracies by Europe’s insiders when they charged ahead with EMU, brushing aside warnings by their own staff economists that monetary union was unworkable without fiscal union. Jacques Delors knew perfectly well that this would lead inevitably to a crisis, but it would be the “beneficial crisis” that would force sovereign parliaments to submit to demands that they would never otherwise accept. Read on and comment >>> Ambrose Evans-Pritchard | Friday, May 14, 2010