Tag Archives | Greece

Germany could face €86bn bill from a Greek default

Who would pay the bill, if Greece defaulted on its current €320bn debt ($340bn)? This is no longer just a theoretical question.  Of course, we have all known since 2012 that Greece would never be able to repay its debt.  But the EU covered up this hard truth by a ‘pretend and extend’ policy: The default deal deferred repayment […]

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Greece and the Eurozone head for showdown over debt issue

We all learnt one crucial lesson from Syriza’s victory in the Greek election last week - voters can halt the European Central Bank (ECB).  Or in other words, protest coalitions can trump elite consensus.  In places like Spain and France, this effect may not work through immediately, but it is being absorbed. Thus Greece and the Eurozone crisis […]

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Political earthquake hits Europe in EU elections

A political earthquake hit Europe in the European Union elections on Sunday night: For the first time since the War, mainstream parties were beaten in major countries In France, the National Front won 25% of the vote, with conservatives 21% and ruling socialist party only 14% In the UK, the Independence Party (UKIP) won 28%, […]

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“Disaster is still some way off” for Cyprus, as Germany prepares to vote

Back in April, the blog suggested that capital controls might remain for rather longer in Cyprus than the “few days or weeks” suggested by the central bank.  And a month later, the bank was still unrealistically claiming they would be lifted “as soon as possible”. Today, the blog’s own view that they could be in place “for […]

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EU banks cut lending to the PIIGS by 23% of GDP

On 7 September 2008, in its now famous warning that a financial crisis was imminent, the blog noted that “‘Deleveraging’ is an ugly word, and it has ugly implications“. The chart above shows just how ugly these implications are becoming for the PIIGS countries (Portugal, Italy, Ireland, Greece, Spain). It is based on data produced […]

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Boom/Gloom Index stalls as austerity worries rise

EU policymakers like to pretend that the Eurozone debt crisis was resolved by the adoption of last March’s new Treaty. An even more disturbing thought is that they might even believe their own propaganda. Who knows? But on the ground, it is crystal clear that the problems continue to multiply. Latest data from the Bank […]

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Leaving the Eurozone would be very difficult

Last December, the blog raised the question of how a country like Greece could actually leave the Eurozone. Many people believe this is inevitable. But how would the practical issues be solved? Now Wolfgang Münchau has taken up the challenge in the Financial Times. His research suggests there are only two possible exit routes: • […]

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Greek default just ‘end of the beginning’ in debt crisis

Yesterday saw the world’s largest ever sovereign debt default, when Greece finally carried through a €206bn ($272bn) restructuring. Yet only the eurozone leaders believe this will solve Greece’s problems and those of the other PIIGS (Portugal, Ireland, Italy and Spain). Greece is still left with a debt too large to be repaid. Its economy is […]

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Greece’s problems lead to EU auto industry job cuts

Greece’s debt default saga seems never-ending. And it is tempting to hope that it only matters to those suffering in Greece and the PIIGS countries (Portugal, Italy, Ireland, Greece, Spain). But a look at auto sales trends since 2005 gives a different picture. As the chart shows, based on ACEA data, sales in the 5 […]

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Central banks alchemy fails to convince

Alchemists have always claimed to be able to perform the impossible. The most common claim was that they could turn lead into gold. In Europe, the European Central Bank has been trying the same trick. It claimed to turn near-worthless Greek bonds into German-quality euros. Now its German board member Jürgen Stark has followed German […]

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