Nick Malkoutzis via Macropolis| Given the concern within the eurozone that the next crisis is just around the corner and that not enough has been done to prevent it, there is a new urgency to learn from our recent past. The precariousness of the Italian situation, and other threats to the single currency, are the best motivation possible to assess what went right or wrong in previous year.
The latest batch of economic growth numbers corroborate a picture which we started to see last year, namely that the extent of the Eurozone recovery is widening. Germany is no longer the sole growth driver. Countries like Spain are catching up.
Italy is a founding country of Europe and the euro. It has an ailing economy, which is not obvious at first sight, but its political weakness is evident. Italy is sick because of northern Europe’s austerity policies. And it can’t be expected to recover on its own because any crisis in its illness might cause the euro to take a definitive tumble.
AXA IM | Those wishing for a successful constitutional reform in Italy need to be aware that it could actually trigger a referendum on the euro. Growing nerves here likely explain the widening of the spread between German and Italian bonds as investors try to hedge ‘currency’ risk.
ATHENS | By Yiannis Mouzakis via The Agora | No matter what overall opinion you have of the Greeks, you really ought to hand it to us for tolerance. Over the last year and a half one of the three key players in Greece’s crisis management team has repeatedly and openly admitted that the prescription for addressing the country’s predicament was wrong.
ATHENS | Op-ed via Macropolis | A Council of State ruling in January looks to have blown a 500-million-euro hole in the government’s fiscal plans. Now a Supreme Court verdict is threatening to create an even bigger shortfall in Greece’s public finances: the emergency property tax introduced in 2011 and levied through electricity bills was unconstitutional.
ATHENS | By Nick Malkoutzis at MacroPolis | Greece has entered its year of growth and recovery. At least that is how the government, its eurozone partners and a number of commentators have billed 2014. Many analysts and politicians also insisted last year that the country had begun this upward trajectory. In reality, though, Greece’s narrative was far from linear in 2013. There is no reason to believe this year will be a straight story either.
ATHENS | By Kathimerini via Presseurop | Whether they are recent graduates or older workers re-entering the workforce after a period of unemployment, Greeks of all ages must accept lower and lower wages. Recent graduates are not the only ones concerned. There are also those over 40 or 50 years old who have lost their jobs. If they find a new one, they cannot expect to ask for more than €700. How much can pay be reduced?
BERKELEY | By Carola Binder | The author compares the fiscal crisis in the 1840 in the US with what happened in the euro zone. Back in the XIX century state governments in America saw infrastructure projects fail and land values and tax revenue fell further, eroding their fiscal positions, making it harder for them to issue bonds and forcing them to pay higher interest rates. Something similar to what Greece is suffering.