LONDON | If you haven’t heard of it, you have simply not been on planet Earth: Grexit was the trendiest word this week, but for the wrong reasons. Would Greece exit the euro zone, shuttering prospects of an approaching global economic recovery? The matter was not whether the Hellenic nation could stand the heat coming from the European Commission, the European Central Bank and the International Monetary Fund, which assured the…
LONDON | The financial City of London would pose as an unlikely critic of Germany’s tactics throughout the long euro rope pulling between the peripheral rotten economies and the apparently unstoppable Teutonic motor. Report after report has come out from City analysts supporting how urgent austerity packages were and pointing at every bad decision made by Greek, Irish, Portuguese, Italian and Spanish politicians, who should have known better. Truth be told,…
Luis Arroyo, in Madrid | Greece was in free fall mode when at the European Central Bank they had the funny idea of pushing the country …downwards. The ECB said it had frozen all operations with Greek banks, which already are suffering a killing capital drain: “Central bank head George Provopoulos told Papoulias that Greeks have withdrawn as much as €700 million ($891 million) and the situation could worsen, according to the transcript…
MADRID | Markets have been plunged into utter chaos by the Greek political deadlock and the prospect parties staunchly opposed to the EU bail out plan may have the upper hand in the incoming elections. Panic has also been driven by light comments picturing Greece’s eviction from the euro as an anodyne and somehow inevitable event. Such a bullish appraisal does not emerge from Anglo Saxon analysts so much inclined to…
NEW YORK | “Cutting alone really doesn’t do it, and that’s why I’m linking the serious budget reductions — real increase to austerity — with a plea to the voters: please increase taxes temporarily on the most affluent and everyone else with a quarter of a cent sales tax,” California governor Jerry Brown said in releasing his $91 billion general fund budget plan this week. These are not easy days for…
LONDON/MADRID | On May 15, Greece faces a €436-million bill in maturities of State bonds issued under international law. Will the Hellenic Treasury pay investors back? In Madrid, Afi analysts told clients the probabilities of defaulting in some of the bonds that did not participate in the last debt restructuring deal are extremely high. They mentioned as one the causes the current complexity of Greek politics after an election result that…
NEW YORK | Restless and suspicious. That is how Wall Street seems to be feeling after France and Greece’s pushback against austerity measures. U.S. stock futures fell on Monday, while Treasuries gained. Investors wonder whether the stimulus advocated will derail bailout deals. And what will happen now that the Sarkozy-Merkel tandem is broken and the Greek parliament will have three new anti-bailout parties represented. This added to the uncertainty created by…
By Begoña Castiella, in Athens |Yorgos Peristeris is CEO at the Greek construction company Gek Terna and chairman of Terna Energy, specialised in renewable energy. Peristeris smiles from his desk at the top floor of the company’s headquarters, an interesting building designed by Michael Hopkins in Athens. Gek Terna is a renowned construction company, while Terna Energy is the first Greek renewable energy company working outside Greece, although both are listed on…
By Begoña Castiella, in Athens | How could one of the poorest, smallest countries in the euro zone endanger the common currency? How could 300 members of the Greek parliament from five political parties and with allegedly little economic knowledge paralyse during two years reforms and budget adjustments that were urgently necessary to reduce the nation’s public debt? And despite two bailouts and a bond restructuring that has cut down in more…
By Gustavo Matías | Professor Emeritus at MIT, Peter Temin understands why German Chancellor Angela Merkel bullies everyone into austerity. But he disagrees. Temin believes too many, too deep budget cuts can prevent countries from paying their debts as it has already been the case in Greece. So Germany could destroy the euro and put the global economy under risk? Something similar happened in 1931, also because of Germany’s influence, and led…