American Way: Barack Obama Ducked the Chance to Tackle America's Financial Death-spiral

THE DAILY TELEGRAPH: When Barack Obama won a second term in office last November a tiny, guttering flame of hope was observed in the breasts of many hard-pressed Americans who wanted common sense to prevail in Washington.

That hope centred not on any naive expectation that Democrats and Republicans would suddenly learn to love each other, but that Mr Obama, freed from having to run for office again and in search of a personal legacy for his presidency, might start to show some leadership.

Last week, sad to report, those hopes flickered and died when Mr Obama delivered a State of the Union address that showed he has absolutely no intention of getting serious about arresting America's long-term financial death-spiral.

This was an infuriatingly dishonest speech. Mr Obama spelled out very clearly America's impending demographic crunch – too many baby-boomers, not enough money to pay for their benefits – but then falsely pretended the problem could be solved by tinkering around the edges.

"Medicare must embrace the need for modest reforms," he allowed, warning that failure to fix America's unsustainable entitlement system would "crowd out the investments we need for our children, and jeopardise the promise of a secure retirement for future generations."

All true, except for that one word, "modest". There is nothing modest about the size of America's financial problems, as Doug Elmendorf, the director of the non-partisan Congressional Budget Office, explained last week when he was up on Capitol Hill spelling out budgetary home truths. » | Peter Foster, Washington | Saturday, February 16, 2013

Italy's Economic Crisis Risks Sparking 'Civil War' in Sicily
THE DAILY TELEGRAPH: The misery caused by Italy's financial crisis could spark a "civil war" in the southern island of Sicily, the mayor of regional capital Palermo said on Friday.

"Because of an explosive mix of despair felt by many families and the stranglehold of organised crime, a civil war could even break out," mayor Leoluca Orlando told the economic daily Wirtschaftsblatt.

"Sicily is the Greece of Italy," said Orlando, a member of the anti-corruption Italy of Values party and a staunch anti-Mafia champion.

"We've managed to stay afloat only because we're a part of Italy," he added.

"Many businesses are shutting, families on low incomes can no longer pay their electricity bills," said Orlando, who has been mayor since May. » | Source: AFP | Friday, July 20, 2012

THE DAILY TELEGRAPH: Monti plans 'Greek-style' takeover of Sicily to avert default: Italian premier Mario Monti is mulling emergency action to take direct control of Sicily’s regional government before the island spirals into a full-blown financial crisis, fearing contagion to the rest of Italy. » | Ambrose Evans-Pritchard | Wednesday, July 18, 2012

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Eurozone Crisis: Germany and France Clash over Eurobonds at Summit

THE GUARDIAN: French president François Hollande marks his Brussels debut by challenging chancellor Angela Merkel over bailout

A major rift has opened up between Germany and France for the first time in 30 months of euro crisis over how to restore confidence in the single currency.

A special EU summit marking the debut of France's President François Hollande saw him challenge Germany's chancellor, Angela Merkel, on the euro, arguing that the pooling of eurozone debt liability – eurobonds– had to be retained as an option for saving the currency. Merkel has ruled out eurobonds as illegal under current EU law.

Hollande told the dinner of 27 leaders that he wanted to see eurobonds established, while conceding that this would take time, witnesses at the talks said.

Merkel responded that this was nigh-on impossible since it would require changes to the German constitution and around 10 separate legal changes, the sources said.

There was no policy breakthrough at the summit, rather a reiteration by leaders of known positions. Any decisions were postponed until the end of next month after French and Greek parliamentary elections on 17 June.

The fissure between Paris and Berlin widened further when Hollande also called earlier for the eurozone's new bailout vehicle to be allowed to draw funds from the European Central Bank and to be able to recapitalise banks directly, both proposals fiercely resisted by Berlin and also currently impossible under EU law.

Senior German government officials had insisted that eurobonds should not be even discussed at the summit. The Hollande team maintained that all topics were on the table and also held open the prospect that France could refuse to ratify Merkel's fiscal pact compelling debt and deficit reduction in the eurozone unless eurobonds were recognised as a possible tool. » | Ian Traynor in Brussels and Patrick Wintour | Thursday, May 24, 2012

Crisis Forces Greeks to Keep Cash Out Of Banks

Euro Split Would Be Cataclysmic
Senior HSBC economist Mark Berrisford-Smith tells Sumant Bhatia that he is now scared at how the eurozone crisis is unfolding. (Monday, September 19, 2011)

Euro Bureaucrats Demand More Power


THE GUARDIAN: Double-dip recession fears see £49bn wiped off shares: City prepares for second round of quantitative easing after sharpest slowdown in UK's services sector in a decade » | Larry Elliott, economics editor | Monday, September 05, 2011

Greek Police Fire Tear Gas on Protesters
THE DAILY TELEGRAPH: Greek police fired tear gas at demonstrators in central Athens at the start of a 48-hour strike to protest austerity measures demanded by international lenders as the price for more financial aid.


As Greece teeters on the edge of bankruptcy, parliament is due to vote this week on a package of spending cuts, tax increases and privatisations agreed as part of a massive bail-out aimed at averting the euro zone's first default.

Following weeks of protests and rolling strikes, ADEDY, the public sector union representing half a million civil servants, and GSEE, which represents 2 million private sector workers, are stepping up pressure on deputies before the votes.

As thousands rallied in Syntagma square near the parliament, hundreds of hooded youths threw stones and bottles at police who responded with tear gas as the initially peaceful mood turned violent. A street umbrella was set fire outside a record-and-book store sending black smoke spiralling into the air above Syntagma Square near the parliament.

The protesters had marched through the capital chanting slogans, banging drums and carrying banners attacking the bail-out deal which many Greeks feel imposes harsh and unjust penalties on ordinary pensioners and workers while sparing the wealthy.

Transport and public services were hit, schools were shut and many shops and businesses were closed, while the streets of central Athens were virtually deserted. » | Tuesday, June 28, 2011

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Inside Story: Greece Protests at Austerity Measures
Inside Story with presenter Teymoor Nabili discusses with guests: Vagelis Agapitos, independent economist; Yanis Varoufakis, professor of economics at the University of Athens; and Fotis Boblas, an activist and protester.

Bailouts Could Have Disintegration Effect on Europe - German MP

Klaus-Peter Willsch »

Geroge [sic] Soros Blames Officials as Greek Crisis Escalates

THE DAILY TELEGRAPH: Billionaire investor George Soros has criticised international authorities for "not providing a solution" for the European debt crisis as Greek sovereign bond yields were pushed to record levels again.

Mr Soros, who spoke out as European finance ministers met today to discuss the crisis, said the officials were "basically buying time" rather than tackling the problems. He added: "This is the normal thing for authorities to do. In this case, I'm afraid they are making a mistake."

Credit markets were thrown into fresh turmoil as Greek debt became the lowest rated in the world following a savage downgrade by Standard & Poor's on Monday.

The yield on 10-year Greek government bonds spiked to a record high of more than 17pc as investors demanded a higher return to cover the risks of holding the debt.

Greek debt is now the lowest rated in the world – below Ecuador and Grenada – with many investors now expecting an uncontrolled default.

The emergency meeting of eurozone finance ministers was called by Jean-Claude Juncker, chairman of the group, and comes ahead of a summit in Brussels next week. The group has set a deadline of June 20 to agree a new aid package for Greece, the country's second in 14 months. Read on and comment » | Louise Armitstead | Tuesday, June 14, 2011

Greece Denies Eurozone Exit Plan
George Papandreou, the Greek prime minister, is denying his country is getting ready to leave the Eurozone.

Rumours that Athens was quitting the single currency has lead to a fall in the value of the Euro.

Finance Ministers from the Eurozone's biggest economies have been holding talks on Greece's debt crisis.

Greece's sovereign debt stands at $470bn. That is more than a year-and-a-half of its entire economic output.

The European Union and the International Monetary Fund agreed a loan of $160bn in May last year. The terms were eased in the spring.

But the financial markets consider the high repayments as unsustainable, leading to growing fears of a default. That could spell disaster for the Eurozone.

Al Jazeera's Tim Friend has more.

‘Greece Is Like a Rat’s Tail. It Will Come Round to Hit Us’
TIMES ONLINE: Eleni is busy. Beyond the doors of the kitchen you can make out her gentle bullying: agape mia, she seems to be saying, my dear, where are the dolmades for Table 3? And back in the restaurant, with its murals of the blue Aegean, she flits from alcove to alcove listening to the sour jokes from her German customers — “Eleni, don’t expect me to pay the bill for the next three years, you Greeks are already emptying our pockets.” The Germans may be angry with the Greeks but they are not about to go without their ouzo. As the country approaches a critical election tomorrow it is becoming clear that bailing out Greece has become a key issue for Germans. “It’s the dominant topic,” says Klaus-Peter Schöppner, the head of the Emnid polling institute. “People are asking what happens to us if we don’t help the Greeks?”

Other questions are beginning to nag the Germans, too: how much Europe do we really need? Suddenly the European project that was for so long the preserve of the elites — the scrapping of the mark, EU eastward enlargement — has become a matter of public debate. It was instructive to study the faces of German trade unionists on May Day as they made their routine pledges of proletarian support to Greek workers; the cameras captured the bemusement of the listening crowds. Solidarity with the Greeks? Paying them money from our taxes so that they could retire in their late fifties while we slog on until 67? Precisely what European idea makes that possible?

The vote that is bringing these doubts to the surface is being held in North Rhine-Westphalia, a region that encompasses the once heavily industrialised Ruhr Valley. There are big cities such as Cologne and Dortmund struggling with the economic downturn and the crumbling of multicultural communities, great swaths of farmland and also pockets of neglect, as impoverished as anything that can be seen in the heavily subsidised eastern Germany. Eighteen million people live in the region compared with only eleven million in the whole of Greece. It is ruled by a coalition of Christian Democrats and Free Democrats, just like the country as a whole.

The election has become a tight contest. If the Government collapses there, Angela Merkel will lose her majority in the Upper House of parliament — and the plans for a radical overhaul of the tax and health systems will be blocked by the Social Democrats. Popular frustration about Greece, and about Europe, has therefore become a critical factor in Ms Merkel’s future. >>> Roger Boyes | Saturday, May 08, 2010

Riots Up Front and Personal

Eurozone Talks Battle to Stem Global Crisis Over Greek Rescue Plan
THE GUARDIAN: Turmoil in international markets hangs over emergency summit of European leaders

European leaders are battling a crisis of confidence in the euro single currency tonight, desperately seeking a formula to reassure the markets as the emergency triggered by Greece's huge debt levels and Europe's response threatened to go global.

An emergency summit of the 16 leaders of the countries using the single currency was held in Brussels, with chancellor Angela Merkel of Germany and president Nicolas Sarkozy of France demanding tougher and quicker regulation of the financial markets in what looked like a doomed attempt to contain contagion from the Greek drama.

With the pace of developments outstripping the ability of political leaders to respond, what was initially called as a summit to bless a €110bn (£95bn) rescue package for Greece turned into a frantic exercise in global crisis management.

Alarm bells were ringing in major capitals across the world where leaders voiced their exasperation with European attempts to contain the fallout from Greece. In what may have been Alistair Darling's last part in trying to manage international financial turbulence, the chancellor took part in a phone conference of G-7 finance ministers discussing the implications for the international bond markets of the Greek debt debacle.

Australia's prime minister, Kevin Rudd, was scathing about the EU package for Greece over three years agreed last weekend by 15 eurozone countries and the International Monetary Fund: "Markets have judged those arrangements to be inadequate," he [said]. >>> Ian Traynor, Brussels | Friday, May 07, 2010

Greek Protestors Unfurl Banners on Acropolis
THE TELEGRAPH: Greek protesters have unfurled banners over the walls of the Acropolis attacking new austerity measures imposed as a condition of an international bailout.

Greek Communist Party members wave flags from the Acropolis archaeological site behind a banner hung in front of the Parthenon temple. Photo: The Telegraph
About 100 protesters from the Greek Communist Party cut through locks on the gates of the major tourist attraction shortly after dawn and unfurled the banners in Greek and English reading: "Peoples of Europe - Rise Up."

Police did not intervene as the protesters carrying red flags stood beside the ancient Parthenon, next to the two large banners. The demonstrators did not attempt to prevent tourists from visiting the site.

Greece's government announced sweeping spending cuts worth 30 billion euros through 2012, in order to secure a rescue package of loans from the International Monetary Fund and the other 15 European Union countries using the euro. >>> | Tuesday, May 04, 2010

Verbunden: Akropolis aus Protest gegen Sparpaket besetzt: Spektakuläre Aktion zum Auftakt der landesweiten Streiks >>> sda/afp | Dienstag, 04. Mai 2010

Greece Announces Financial Bailout

Revolution from Greece's Ruins as Crisis Deepens
THE TELEGRAPH: As Greeks face changing their way of life, rioters in Athens clash with police at the start of a very long, painful summer for the country.



The week was already going badly enough for mild-mannered Greek prime minister George Papandreou. After months of insisting that his country would be able to claw its own way out of decades of mismanagement and corruption, his belated SOS to the International Monetary Fund (IMF) ensured that Greece's world famous ruins are now financial, not archaeological.

But then things got worse. Even as Mr Papandreou likened himself to Homer's great survivor, Odysseus, his country's fortunes were being sunk between a modern Scylla and Charybdis: German intransigence over a financial bailout on one side, and market jitters that downgraded Greek bonds to junk status on the other.

On Sunday, however, as the details of an economic life raft from the EU and IMF are due to be announced, Mr Papandreou will be forced to survey not simply the wreckage of the Greek economy, but the beginnings of "cultural revolution" that analysts say his homeland's crisis is set to unleash across the continent of Europe. >>> Harry de Quetteville and Paul Anast in Athens | Saturday, May 01, 2010

Debt-ridden Greeks Angry at Defense Deal

Edmund Conway – Greek Crisis: Athens to Ashes
THE TELEGRAPH: The Greek horror story should scare us all, says Edmund Conway. Its problems are not unique.

Anger bubbles over in Athens Photo: The Telegraph
It has all the ingredients for a perfect Hollywood sequel. The cliffhanger plot kicks off right where its predecessor ended; the cast is stellar, some characters from the original reprising their roles. But this time the stakes are even higher, the mood even tenser.

Greece is on the brink of bankruptcy. Based on almost any yardstick, markets are now betting that the government will default on its debt. At a staggering 18 per cent, the going rate to borrow for a mere two years is similar to the penal rates credit card companies charge their dodgiest customers. The government, International Monetary Fund and European Union have promised, vaguely, to hand over the necessary cash to help tide the country over, but to no avail.

It would be all the more shocking had it not happened before. But Greece's problems today are merely Lehman Brothers redux. This is Global Meltdown 2. Granted, this time it is a country, rather than a mere bank, that faces collapse; this time, the victim may really be too big to fail. But the pattern is eerily familiar: the money starts to run out; investors realise with horror that there is a real chance of failure; the politicians promise that they will stand behind the institution; in a last-gasp attempt to halt the disaster, they ban short-selling; eventually the law of gravity proves irresistible, investors stage an effective run on the banks and the end is nigh.

Faced with such a scenario, there are two options: confront the crisis, knowing you simply may not have the firepower to deal with it, or go running, screaming, for the hills. The head of the Organisation for Economic Co-operation and Development, Angel Gurria, has chosen the latter path, declaring that the contagion is spreading "like Ebola... when you realise you have it you have to cut your leg off in order to survive".

Before we lapse into amateur dramatics, however, let's establish the facts: the market for Greek government debt has effectively frozen, much as the money markets did worldwide in 2007 – the initial trigger point for the crisis. Its banking system, stacked high with those same government bonds, is effectively insolvent. The country had been due to return to investors on May 19 to raise money; if a bail-out cannot be agreed by then, Greece will have no option but to default. But even that deadline is increasingly academic: the country has fallen victim to a run, and as anyone who watched Northern Rock's demise knows, what follows is not usually pretty. How did it come to this? >>> Edmund Conway | Thursday, April 29, 2010

Greeks Absorb Reduced Credit Rating