HSBC scandal bad timing for Juncker
MADRDD | Sean Duffy | Markets are likely to remain volatile in the week ahead as investors await indication on Greek standoff.
debt
Greece and US payrolls likely to add pressure on European markets
MADRID | By Sean Duffy | Thursday brought some positive predictions on the Spanish economy from the European Commission, but buoyancy on European markets may be negated by data due from the US later today.
Draghi corners Tsipras
MADRID | By JP Marín Arrese | Tsipras rebellion was ruthlessly quelled by the ECB governing board last night. Neither Greek sovereigns, nor publicly-guaranteed bond issues, will stand as eligible collateral for funding facilities, thus plunging the financial system into a crippling credit-crunch. The emergency liquidity arrangement managed by the local central bank severely caps new public financing to a meagre €3.5 billion amount. The new government faces the unpalatable choice between surrender or bankruptcy.
Pressure on Greek debt: A nudge or a punch in Athens’ face?
MADRID | The Corner | Despite the markets’ first negative reaction to the ECB’s restricting Greece access to its direct liquidity lines, Morgan Stanley analysts reminded on Thursday that nobody should be that surprised: in 2012, one third of the Greek balance sheets were financed by the ECB, and most via ELA. Plus, Greek banks can still get ECB liquidity if they use ECB eligible collateral.
Less is more: The Greek government needs a chisel, not a sledgehammer
By Jens Bastian via MacroPolis | The parliamentary majority achieved by the SYRIZA-led coalition government following the 25 January elections constitutes a strong political mandate in mathematical terms. Among one of the many immediate challenges facing the new administration is trying to translate its numerical advantage into a majority of support among Greek citizens, including those who did not vote for the senior coalition party.
Greece and common political sense
LONDON | Sigrún Davíðsdóttir | Forget economics, politics is key to understanding the Eurozone. The cries of “Grexit” lately have mostly been a repetition of an earlier discourse: in February 2012 Citi’s economists Willem Buiters and Ebrahim Rahbari coined the term “Grexit,” by July 2012 estimating its likelihood to 90%. Cheered on by the media, economists have taken over the debate of the Eurozone which is why much of it has been such a futile exercise: it is not economics, which ties the Eurozone together but the political determination of its leaders to make the euro work. With political will likelihood of any exit is 0. Ergo, Grexit is as unlikely now as it has always been in spite of the EU brinkmanship. One route Greece seems to be exploring is a tried and tested one: the “bisque clause” from 1946.
Draghi holds the winning cards
MADRID | By JP Marín Arrese | Attempts to convince Tsipras and his colleagues to call off their open mutiny against the discipline imposed under the Greek bailout seem to be doomed. The Greeks bet on a strategy that forces European partners to cave in, should the prospect of huge turmoil materialise. After all, they are fully aware that Greece will prove unable to repay its debt unless it grows at 7% rate for the coming 30 years.
Greek odyssey to dominate the week ahead
MADRID | By Sean Duffy | Markets will be looking to how relations between the new Greek Government and European creditor nations play out in the week ahead. After a week of tense negotiations, the stakes are increasing all the time. Greek claims of insolvancy have irked its eurozone partners, but can all sides find a middle ground in the coming days?
Striking a deal with Tsipras
MADRID | By JP Marin-Arrese | European governments are openly expressing dismay at the Greek election outcome. They have waited quite a long time to convey their congratulations wishes to Tsipras, the new elected Prime Minister. Berlin and Brussels stressed that debt restructuring was out of question while reminding him of the need to keep pledges from former governments as a pre-condition for securing financial support. Yet, they should come to terms with him, the sooner the better, as a thoroughly deceived and frustrated European Council member can inflict damage to EU action.
Understanding the German approach towards Greece
By Christian Odendahl via Macropolis|With the new government in Greece preparing for the negotiations with the troika, the German position in particular has been a topic of debate, both in Greece and on markets.