The Eurozone Crisis Thread

rmde at german bougies staying in rental in perpetuity

Stable housing market tho iirc, with v strong tenancy rights

Spain, Italy, Portugal, Greece and Cyprus probably have a much higher percentage of people in their late twenties and thirties still living with their parents.

the net worths for those countries are optimistic/outdated

This is absolutely nuts if true:

http://www.nakedcapitalism.com/2013/04/yanis-varoufakis-greek-banksters-in-action-on-the-latest-twist-in-the-story-of-mafia-style-terror-spreading-through-the-greek-polity.html

On 11th September 2012, late at night, a group of 4 or 5 people staked out my home. It was only accidentally that I avoided being ambushed (my motorcycle had a flat tire and I thus returned home in a friend’s car). Upon noticing the stalkers I called the police and asked them to come quietly. The police arrived noisily and went to a nearby house first, thus giving the men plenty of time to make their escape. For days, the police refused to investigate properly or to call eyewitnesses to make a statement (later, after I published the story, they did). Since then, I have been denied police protection (unlike most other journalists) and have had to resort to private security.

Soon after the failed ambush, a woman visited my office insisting that I should see her to discuss “the bankers’ designs” on me. I decided to meet with her. She was a frightened woman who claimed to be in grave personal danger. She said that she had been, and was, part of a group comprising former agents and salaried members of the Greek intelligence services, connected to business interests who worked on, at first, wrecking my public image and, later on, planning my physical demise. She added that it was her who, following specific orders, had forged the document ‘proving’ that I was on the payroll of the secret service – a document which her group then circulated to the various blogs that used it.

According to her testimony to me, a group stationed in Skopja was engaged to “see me off”. Part of the same plot concerned the defamation of another woman, a former bank manager with The Bank, who had been fired on false charges of embezzlement because, in truth, she possessed damning evidence concerning The Chairman’s family’s activities. Their plan, vis-a-vis this former bank manager was to plant narcotics in a restaurant that she owned on the island of Zakynthos and to orchestrate a very public arrest so that, in the future, if she ever revealed her evidence against The Chairman’s family, the press could dismiss her as a ‘drug dealer’. To prove her story, my interlocutor handed over a sequence of photographs that were the result of the surveillance of the former bank manager taken by «her group». The woman further claimed that she had not dared distance herself from that group but she was afraid that she would be killed upon completing her ‘tasks’.

And some depressing lols from the comments:

‘Insults even below the belt flew through the air, glasses full of water were broken while even a microphone felt also victim to extreme-right testosterone. The parliament room turned into an “American bar”, an expression Greeks use to describe a place where everybody can come and do whatever one wants. The “circus” started on Thursday after a meeting break and after Venizelos told reporters why the meeting was interrupted. Instead of speaking about some disagreements, he told reporters:

“There are tensions due to testosterone; it’s a matter of endocrinology. In any case, medical science has not concluded whether psychiatry precedes endocrinology or vice versa.”

When the meeting resumed, Ilias Kasidiaris, Golden Dawn MP, took the floor and said” I want to denounce that Mr. Venizelos speaks insultingly about the committee members… It’s you, Venizelos, lacking testosterone.”

Venizelos: I can’t follow such sexist behavior, Mr. Chairman, protect me.

Kasidiaris: I am a man; I’m not a hustler, I ‘m not a fraudster

Venizelos: But you are a fascist. The parliament cannot be in dialogue with such Nazi behaviors

Kasidiaris throws down glass full of water, breaks the microphone and beating his hand on the table

Kasidiaris: Shut up, your are ridiculous and fat

Venizelos: Mr. Chairman, protect me

Chairman to Kasidiaris: I withdraw from you the right to speak.

Kasidiaris left the meeting, Chairman Markogiannakis told reporters later, stressing “that was fascism in action.”

François Hollande, current president of the Republic, sat pillion to trysts with his mistress in the flat of a moll of a Corsican gangster killed in a shoot-out on the island last year.

http://www.lrb.co.uk/v36/n10/perry-anderson/the-italian-disaster

http://www.theguardian.com/business/2015/jan/15/currency-markets-switzerland-franc

I think the exchange rate vs the USD is now marginally worse than at the bottom of the 2005 dip. Nightmare for British companies selling to Europe.

i'm currently working in CH but spend a fair amount of time back in the UK. most other people i work with are foreign researchers, so everyone is in quite good spirits today. let's see how long it lasts...probably until our US parent company can no longer afford to pay swiss salaries.

Turns out 37% of Polish household debt is owed in CHF

http://www.economist.com/news/europe/21639760-poles-were-slow-get-out-swiss-franc-mortgages-now-they-are-paying-price-currency-risk?fsrc=scn/tw/te/bl/currencyrisk

€1.1tn QE package announced. Will be interesting to track FX rate over the next few days.

German economists at Davos are reportedly seething, understandably so.

this is the same figure commonly predicted last week

someone clever tell me why I'm feeling terrified at ireland selling bonds at negative rates

The basic idea of negative rates is that banks may have been parking their money in government bonds, even at extremely low interest rates or even at no return, rather than lend it to its own customers, such as businesses or consumers who wish to spend it. If government bonds are set at negative interest rates, those banks will be forced to pay for the privilege of parking money, creating more incentive to loan money into the economy, where it will circulate.

The main reason to be terrified is that this negative rate strategy only makes sense in an economy that is already in a deflationary spiral, or is seen to be poised on the edge of deflation. Deflation is bad, bad news in general. Money slows down or stops circulating in a deflation. People in debt are especially at risk.

http://www.lrb.co.uk/v14/n19/wynne-godley/maastricht-and-all-that

http://blogs.channel4.com/paul-mason-blog/greece-ireland-economics/3805

Then there’s agribusiness. Irish agriculture, from a country of 3 million people, produces enough to feed 50m worldwide and growing. If you look at the the profile of imports and exports from Ireland to Britain, it’s much the same via mix and per-capita GDP as the trade between the north and south of Britain. In other words – hugely controversial to say politically – Britain and Ireland are close to being a single economy with two currencies. - See more at: http://blogs.channel4.com/paul-mason-blog/greece-ireland-economics/3805#sthash.323jo1Ai.dpuf

this ending: "If you wanted to create such mayhem in an economically destroyed country, you would probably not want that country, simultaneously, to enjoy the most pro-Russian political culture in Europe, and be one border away from the Islamic State, with 42,000 Syrian migrants a month landing on its island outposts for good measure."

got that back to front

that's clearly a reference to this

In a shock escalation of the rhetoric surrounding bailout talks in Brussels, the Greek defence minister Panos Kammenos vowed: “If they strike us, we will strike them.”

European creditors told Athens to stop “wasting time” putting forward its proposals for economic reforms pledged by the new left-wing Syriza-led coalition government.

If an agreement cannot be reached, the International Monetary Fund has said it will discontinue payments on a £172 billion bailout, forcing Greece to go bust and crash out of the eurozone. Mr Kammenos said: “If they deal a blow to Greece, then they should know the the migrants will get papers to go to Berlin.”

“If Europe leaves us in the crisis, we will flood it with migrants, and it will be even worse for Berlin if in that wave of millions of economic migrants there will be some jihadists of the Islamic State too.

grexitan standoff

it's like game of thrones but isis are the dragons and golden dawn are the zombies

what a weird threat. xenophobestakes

fascism is coming

among greeks there's no love lost on the germans

Kammenos is from the right-wing anti-austerity party. Syriza were one seat from an overall majority.

http://www.theguardian.com/commentisfree/2015/jun/17/guardian-view-euro-crisis-greek-exit-would-be-europes-tragedy

http://www.theguardian.com/business/2015/jun/17/tsipras-to-meet-putin-over-bailout-loan-as-fears-of-greek-exit-from-eu-mount

http://www.theguardian.com/world/2015/jun/17/greece-says-bailout-deal-is-up-to-troika-amid-speculation-over-exit-from-eu

http://www.consilium.europa.eu/en/press/press-releases/2015/06/27-eurogroup-statement-greece/

better link: http://www.consilium.europa.eu/press-releases-pdf/2015/6/40802199986_en.pdf

yasssss

continuing austerity or the euro. tough choice for greece upcoming.

can't say the prospect a huge failure for the EU puts me in such a jovial mood. I wonder which one of the big boys will step in afterwards while the EU tells itself it did all it could

prospect of a huge failure

I'm a bright side kind of guy.

Game theory y'all:

Yanis Varoufakis ‏@yanisvaroufakis 9 Jun 2013
@WilhelmRoepke Quite. France is key. Grexit = Por-xit = Spa-xit = Ita-xit, which would then lead Germany to cut France off. Make no mistake

Wilhelm Röpke ‏@WilhelmRoepke 9 Jun 2013
@yanisvaroufakis I would not conclude that Italy needs to leave nor Spain. Both need to strive. But if there is a willingnes both can cope

Yanis Varoufakis ‏@yanisvaroufakis 9 Jun 2013
@WilhelmRoepke If Spain goes, Italy is a gonner. If Portugal leaves, Spain will follow. If Greece leaves, Portugal cannot stay. QED

http://www.lrb.co.uk/v14/n19/wynne-godley/maastricht-and-all-that

Just skip to the last para and:

What happens if a whole country – a potential ‘region’ in a fully integrated community – suffers a structural setback? So long as it is a sovereign state, it can devalue its currency. It can then trade successfully at full employment provided its people accept the necessary cut in their real incomes. With an economic and monetary union, this recourse is obviously barred, and its prospect is grave indeed unless federal budgeting arrangements are made which fulfil a redistributive role.

'greek game theory' is normally just 'bluster' afaict

making fringe right winger panos kammenos defence minister ~stirred the pot~ a little (threats to flood germany with jihadist migrants, tho I'm not sure how the already dire situation with refugees could improve if greece leaves) but that's about all they can do until there's some better offer of outside cooperation. sometimes it feels like people are just wishing greece away

Greece would've already gone if there was zero risk the floodgates wouldn't have been opened.

Podemos (and Citizens) to come, then Marine Le Pen in France as the final act. Cameron may not need to renegotiate anything at this rate, as there might not be anything left. The centre falls and a battle between the far left and right is the result - where have we had this one before?

I think that's overstating things. The Front Nationale is against the euro, but so is the Parti de Gauche. I guess that's far right versus far left, but I can't today predict how the center will unfold to those sides, if at all.

The Euro is first and foremost a political project. Greece is not central to that project.

hope they told them that when they joined

Hmmm...

Greece leaving the EU is so 50/50 to me I wouldn't even know how to handicap it

them leaving is still odds against (5/2 - 13/5) on the betting exchanges at this point of me posting... but fuck knows.

afaics, the referendum is meant to provide the government with political cover for the upcoming grexit move and absolve them from the pain and dislocation this will cause in the greek economy. it's hard to see how they could refloat the drachma while repudiating their euro debt. they might be forced to sell their souls to putin to acquire a source of ready credit. interesting times.

theory is that with a clean debt slate Greece will have access to the markets again (primary surplus and all that jazz). but God knows what a Greek 10yr bond will yield by then...

I would guess that the longer term political implications (particularly on the rest of the Balkans) of a Greek state with rising far-right presence propped up by Putin would be scary enough that all other parties would do virtually anything to avoid it. If that became a serious possibility, would the US not have a major interest in bailing Greece out?

Could Russia even afford to keep Greece afloat for any length of time?

Russia could offer an advance on Turkish Stream gas payments but it wouldn't do a great deal to resolve the crisis - at best it could delay it by a few weeks. Russian capital reserves are lower than they would like at the moment and i don't think there's much appetite for throwing vast sums at Athens.

There's also a very limited direct economic involvement in Greece, compared to Cyprus. Russia's loan to the latter was partly due to the risk to Russian money held by Cypriot banks.

i agree there will definitely be all manner of 11th hour shenanigans if exit looks likely. so many people i speak to are furious with greece, it's all about pensions to them

http://www.theguardian.com/commentisfree/2015/jun/28/greece-europe-imf-democracy

Did I miss this one?

She was offering not a solution but a narrative: the Greeks were in this situation because they were bad people. They wanted a beneficent state, but they didn’t want to pool their resources to create one. The IMF was merely the instrument of a discipline they dearly needed. This line has broadly held – the debtors are presented as morally weaker than the creditors. To give them any concessions would be to reward their laziness and selfishness. The fact that debt is a two-way street – that the returns on debt exist because of the risk that the money might be lost, and creditors have their own moral duty to accept losses when they arise – is erased by this telling of the events.

Obviously "moral duty" and a buck fifty will get you a cup of coffee (maybe).