Now that the bubble of the Greek success story has, thankfully, burst, it is perhaps apt to take a good look at the track record of Greece’s finance minister: the talented Mr Gikas Hardouvelis. Readers that harboured hopes of a Greek turn-around (against this blog’s repeated warnings) ought to brace themselves – the finance minister’s story is not recommended reading for the faint hearted…
The spectre of Greek contagion seems to be returning to the Eurozone. At least this is the fear that I sense by talking to financial journalists across Europe. In this interview with Jorge Nascimento Rodrigues (for EXPRESSO) I argue that: “The Euro Crisis never went away. What happened was that Mr Draghi’s skillful interventions in the summer of 2012 suppressed the crisis in the bond markets but, at the same time, pushed it deeper into the foundations of the real economy. It was inevitable that, as the crisis was wrecking these foundations (with deflationary forces, desperately low levels of private and public investment and increasing debt to GDP ratios in the Periphery), it would resurface in the bond and equity markets. It does not matter whether the trigger was Greece, Portugal or Italy. What matters is its inevitability.”
In this interview, with Deutsche Wirtschafts Nachtrichten (German Business News), I address the question of what happened in recent days in the Greek bond markets, in view of the Greek government’s failed attempt to argue that Greece is about to exit its Bailout. Regular readers may notice that I am merely repeating what I was saying back in April. For the full interview (in German, as it appeared in DWN) click here. For the English version, read on… Continue reading
As elections begin to loom in Greece, an extraordinary propaganda drive has commenced. Its purpose? To impress upon the world (with a view to swaying Greek pubic opinion) that Greece is out of the woods; that Greek public debt is (miraculously) sustainable, that the banks are back on track, that investment is beginning to flow again, that unemployment is in the mend. Ofcourse, none of this is true. Greece is being made over as a Potemkin village prior to the forthcoming General Election. In future posts I shall show that the reality on the ground continues to be one of a depressed economy, with an unsustainable public debt, a banking system that only functions courtesy of the ECB’s willingness to turn a blind eye, a private sector in which everyone owes to everyone and no one can pay and investment that is utterly non-existent. For the time being, here is a short interview with an Italian journal – click here. For the original English text read on… Continue reading
In this Q&A with a Greek journalist, on the occasion of the launch of the Greek translation of the Modest Proposal, James K. Galbraith argues that Italy and Greece can play an important role in changing the terms of the European ‘conversation’, so that rational, minimalist solutions like the Modest Proposal can have a chance of saving the Eurozone. He also explains that the Greek implosion was always a political choice by Berlin and Frankfurt; and that if the troika squeeze is lessened, it is due to SYRIZA’s success – not to the success of the austerity program. Finally, he answers an important question on the Chinese government’s investment strategies in Greece and in the rest of the Eurozone.
“The Modest Proposal requires a change of thinking, not a change of European Treaties.”
“If Greece has been declared a success, it is largely due to the success of SYRIZA – not of the austerity program”
The sordid relationship between the owners of the Bank of Pireus and MIG (a holding company that used to own one of the two failed Cypriot banks, as well as a swathe of Greek companies) is well documented. Recently we witnessed a new chapter in this saga, one that went almost unnoticed and which was quietly condoned (like all recent scandals) by the Athens government and the troika. Klaus Kastner blogged on this deal in a highly informative recent post, entitled MIG: A great place to invest €250 million?, and also sent me an email with the following question/point: “It baffles my mind how a bank like Piraeus where the state has part-ownership would buy €250 million convertibles of the holding company of a group which is as shaky as the MIG Group (unless, of course, the 250 MEUR were used to repay loans to Piraeus). MIG may have operating companies of operational worth and market prominence but the whole group is built on hot air and, at least for the time being, the operating companies are incurring horrendous losses.” My answer to Klaus follows… Continue reading
In conversation with Andrew Brady of USiLive regarding the state of Europe now.
In 2013 Greek taxpayers borrowed from the rest of Europe’s taxpayers €41 billion to pump into the Greek banks. This is well known. What is not known is that, also in 2013/4, the Greek banks received an additional, well hidden, €41 billion bailout loan from Greek and European citizens. This bailout was never authorised by any Parliament or even discussed in public anywhere in Europe.
While the international press continues to celebrate Greece’s recovery, the reality on the ground becomes bleaker, less sustainable, and nastier than ever. In this post I shall be conveying the grim news from two fronts: the labour market and the government’s finances.
Eurobank is an apt example of Greek ingenuity. Its name is a coup in itself. Beyond semantics, however, and coming to recent developments, Eurobank is a wonderful example of the Greek establishment’s ingenious efforts to defraud Greek and European taxpayers, and then to proclaim a glorious Greek Success Story, weeks before the European Parliament elections. (You have already seen, here, the other plank of this campaign, also known as the Greek primary ‘surplus’…) Continue reading
ELSTAT, the official Greek statistical service, has put out a document in response to my post unveiling, what I call, their New Greek Statistics over the calculation of the Greek government’s primary budget outcome for 2013. In addition, Eurostat gave an informal response to various journalists who took the matter to them. Full marks for defending the indefensible. Continue reading
It is official! The Greek government now confirms that the much lauded Greek government primary surplus for 2013 was a mirage created by the return of Greek Statistics (see this recent post). And also that the statistical trickery involved had the full approval of Eurostat, of the troika, of Berlin etc. The ‘confession’ has come in the form of the deafening silence in response to the revelation that approximately €5 .4 billion was taken off government expenditure through the discovery of a non-existent ‘white hole’ in the government’s revenues. Yesterday, a tweet from a spoof account in the name of a Finance Ministry official reminded me that the New Greek Statistics are highly reminiscent of the Old Greek Statistics… Continue reading
In his latest Financial Times column Wolfgang Münchau concurs with much of what I have written here (on the Greek social economy’s deep coma) and here (on the reasons why investors are piling in) but goes on to suggest that Greece should seriously consider exiting the Eurozone. In today’s post I offer an evaluation of his argument. In brief, I argue that, while Münchau’s assessment of the situation on the ground is spot on, the use of the ‘nuclear option’ (i.e. threatening to exit the Eurozone) is neither desirable nor necessary as a means of forcing Europe to change its ways. Continue reading
The Irish and the Greeks are, in many ways, very different people. And yet, caught up in the Euro Crisis, our fortunes have become too close for comfort. Recently, European authorities have devised a creative new method for damaging the people of Ireland and of Greece further. The new method involved imposed changes on the public financing of bank recapitalisations that shift even greater burdens on taxpayers and on the weaker members of our societies. This article examines the changes and answers the pertinent question: Why is Europe doing this?
Jorge Rodrigues, of Portuguese daily Expresso, wrote to me with a question: “What lessons can countries like Portugal learn from the Greek PSI of 2012, now that their post-bailout debts have also become unsustainable?” My answers were published in Expresso on 17th March 2014. My original answers in English follow: Continue reading
This is our sixth article for the Witte de With Review (an initiative of Rotterdam-based Witte de With Center for Contemporary Art of which we, vitalspace.org and I, are party to, the ‘Athens Desk’). Click here for the Witte de With site which contains photos below. Or read on… Continue reading