Action by the ECB, doomsday scenarios

Wednesday morning update:
The ECB takes action to stabilize the Euro:  http://www.washingtonpost.com/business/markets/ecb-to-launch-2nd-round-of-unlimited-3-year-loans-to-europes-banks/2012/02/29/gIQA3R8ZhR_story.html

What if Greece defaults?
http://www.washingtonpost.com/business/economy/european-debt-crisis-worst-case-scenarios/2011/10/20/gIQA2hTa0L_gallery.html

More on the Irish referendum from Der Spiegel:
http://www.spiegel.de/international/europe/0,1518,818313,00.html

And for those who love hearing about derivatives and credit-default swaps:
http://dealbook.nytimes.com/2012/02/28/swap-talks-over-greece-could-test-the-market/

...or game theory: http://www.kurat.com/links/greek-crisis-isnt-economics-its-game-theory?&stream=greek-crisis-0

Germany and Greece - more political fallout

A quick Tuesday morning update:
The New York Times has reported on the tense vote that ultimately led to the German Bundestag's approval of the latest Greek rescue package.  http://www.nytimes.com/2012/02/28/world/europe/germany-backs-aid-plan-for-greece.html?adxnnl=1&partner=rss&emc=rss&adxnnlx=1330401602-I8BmO/o5DCHp2UlhNhr6jg
The vote has left Chancellor Angela Merkel in a weakened position, since she had to rely on opposition votes to get the overwhelming majority.  Ongoing public opposition to the bailout may ultimately damage the coalition government, and possibly lead to new elections.

Former Chancellor Helmut Kohl has stepped into the fray http://www.spiegel.de/international/europe/0,1518,818095,00.html urging support for the European Union and Eurozone -- noting that maintaining peace remains an important goal.

As indicated in this Economist blog, economists are pessimistic about the prospects for Greece remaining in the Euro. http://www.economist.com/blogs/freeexchange/2012/02/euro-crisis-7?fsrc=scn/tw/te/bl/beyondgreece

More political turmoil as Ireland calls for a referendum: http://www.nytimes.com/2012/02/29/business/global/european-leaders-postpone-debt-crisis-meeting.html?_r=1&partner=rss&emc=rss

Another side of the fiscal crisis:  The sad death of a toddler in Ireland lays bare the problem of "Ghost Estates:
http://www.nytimes.com/2012/02/29/world/europe/irish-boys-death-stirs-debate-on-ghost-estates.html?partner=rss&emc=rss

The Politics of the Euro Crisis

News reports today indicate that German voters are ovewhelmingly against the Greek debt bailout which the Germany parliament must approve in a vote set for Monday.  As noted in today's story (http://news.yahoo.com/germans-overwhelmingly-oppose-greek-bailout-poll-141634352.html):

"the prospect of the ruling bloc failing to win a majority on its own would be a humiliating setback for Merkel, with some analysts and opposition leaders warning it could endanger her coalition.

Further signs of tension in the coalition emerged on Saturday when Merkel's Interior Minister, Hans-Peter Friedrich, became the first member of her government to openly call for Greece to leave the euro zone."

Despite the fact that many governments have fallen in the course of the Euro crisis (including Ireland, Portugal, Italy, Spain and Greece), the recent focus has mainly been on the negotiations surrounding the Greek bailout.  Meanwhile, domestic politics has been playing out in their own way, as can be seen in the German poll and the riots in Greece. The democratic legitimacy of the European Union has always been an issue, with many discussions and analyses centered around the "democratic deficit" between the EU and the citizens of the member countries.  Unelected prime ministers in Italy and Greece have been brought in because of the need to have non-politicians who can take the tough measures it was felt were needed, in particular, fiscal austerity measures that previous democratically elected governments could or would not implement. Many analysts have talked about the dangers of a Greek default or a deeper recession in Europe, but more attention needs to be paid to the toll that the crisis is taking on the confidence of citizens in democratic institutions.

Great interview with U.S.Economist Kenneth Rogoff

On  Germay, Greece and the reality of the current crisis from Germany's Der Spiegel website:  http://www.spiegel.de/international/business/0,1518,816071,00.html

A good breakdown of the deal:  http://www.guardian.co.uk/business/2012/feb/21/greece-bailout-key-elements-deal?CMP=twt_fd

However, economists are still skeptical (as am I) that the Greeks will be able to follow-through or that the measures will work (can you say controlled default?): http://www.guardian.co.uk/business/2012/feb/21/greek-bailout-what-the-experts-say?CMP=twt_fd

The deal as it happened from the UK Telegraph: http://www.telegraph.co.uk/finance/debt-crisis-live/9094900/Debt-crisis-and-Greek-bailout-deal-as-it-happened-February-21-2012.html

Gordon Brown's dour view:  http://www.washingtonpost.com/opinions/europes-role-in-the-world-reshaped-by-economic-crises/2012/02/21/gIQAoNUiRR_story.html

Monday's news and the EU Summit

AGREEMENT REACHED! http://www.guardian.co.uk/business/2012/feb/20/debt-crisis-euro

Five reasons to be optimistic about Europe:  http://www.businessweek.com/europe/five-reasons-europe-looks-less-disastrous-02192012.html

From the UK Guardian:  http://www.kurat.com/links/greek-ministers-work-against-clock-to-implement-severe-budget-cuts?&stream=greek-crisis-0

Ministers optimistic about deal:  http://blogs.wsj.com/eurocrisis/2012/02/20/europe-crisis-live-blog-greek-bailout-deal-close/

Merkel as "Europe's Iron Lady" http://www.businessweek.com/news/2012-02-20/merkel-as-debt-crisis-iron-lady-bucks-german-street-on-greek-aid.html

Greek debt negotiations go late into the night:  http://www.dailyfinance.com/article/greece-likely-to-get-bailout-but-issues/892761/

More articles on Greece

This is a good one for understanding the basics behind the potential Greek default:  http://www.csmonitor.com/Business/The-Daily-Reckoning/2012/0216/Greek-crisis-101-How-to-make-money-off-your-debts

More pessimism on Greece from this German Marshall Fund blog:  http://blog.gmfus.org/2012/02/greece-going-from-worse-to-just-plain-bad/

From the UK Guardian:  http://www.guardian.co.uk/world/2012/feb/17/greece-crisis-fears-bankruptcy

Preparing for Greece's departure from the Euro?

This article from AOL news caught my eye:  http://money.aol.co.uk/2012/02/16/eu-urged-to-let-greece-leave-euro/?icid=money|DL_3_link

Commentators on public radio have been split on the issue of Greece's potential default. One argued that a default and return to the drachma is unthinkable and would be too costly for Greece.  Another argued that Greece has no choice -- in order to become competitive and have economic growth, Greece will have to leave the Euro and use a devalued currency that would ultimately allow for economic growth in the medium term, even though it would lead to difficult times in the short term (hard to believe they can get more difficult than they are now).

As this subheading from a BBC article states - "Something has snapped. No longer are Europe's leaders pledging to save Greece at all costs." http://www.bbc.co.uk/news/world-europe-17040565

Uncertainty continues...http://www.washingtonpost.com/business/markets/debt-crisis-contagion-fears-back-due-to-continued-uncertainty-over-greek-bailout/2012/02/16/gIQAFfJHHR_story.html

Despite assurances, situation still tenuous for Greece

Despite assurances from the leaders of the main political parties that they would follow through with reforms after an election, German officials were still leery of Greece's intentions and ability to meet EU demands:  http://www.reuters.com/article/2012/02/16/us-greece-idUSTRE8120HI20120216

An FAQ on Greece: http://www.washingtonpost.com/world/europe/a-look-at-commonly-asked-questions-and-the-latest-developments-in-greeces-financial-crisis/2012/02/15/gIQAcBwMGR_story.html?wprss=rss_linkset&Post+generic=%3Ftid%3Dsm_twitter_washingtonpost

Happy Valentine's Day -- and more on Greece

A Greek default is looking more likely as Greek leaders work to reassure their Eurozone partners that they are capable of implementing the reforms passed this past weekend, and that they are ready to make even more cuts.  Protests continue, with pensioners and others on the streets.

From Business Insider Mike "Mish" Shedlock
http://www.businessinsider.com/the-latest-greek-deal-is-already-unravelling-2012-2

From the UK Guardian -- Greece Stumbles Defiantly Towards Default:  http://www.guardian.co.uk/business/2012/feb/15/greece-stumbles-defiantly-towards-default
and Eurozone ministers cancel meeting: http://www.guardian.co.uk/business/2012/feb/14/eurozone-ministers-cancel-greece-meeting

From Reuters: http://news.yahoo.com/greece-faces-tough-job-seal-rescue-034908192.html
The reforms in detail from CNN: http://www.cnn.com/2012/02/14/world/europe/greece-austerity-detail/index.html?hpt=wo_c2

Opinion -- is extreme austerity breeding radicalization of politics? http://edition.cnn.com/2012/02/13/opinion/greece-politics-opinion/index.html?hpt=ieu_t3


lest we forget the rest of Europe -- Moody's downgrades: http://www.spiegel.de/international/europe/0,1518,815097,00.html

Climax nears in Greek drama and the human cost of austerity

From Reuters:  http://www.reuters.com/article/2012/02/13/markets-global-weekahead-idUSL5E8D94PF20120213

Radio story from NPR on people's reactions to austerity in Greece:  http://www.npr.org/2012/02/13/146795693/greek-protesters-rally-against-drastic-cuts

The riots in pictures from the UK Guardian:  http://www.guardian.co.uk/world/gallery/2012/feb/13/greece-austerity-protests-eurozone-bailout#/?picture=385909444&index=15

The human cost - video from CNN:  http://www.cnn.com/video/?hpt=wo_c1#/video/world/2012/02/13/chance-greece-middle-class.cnn

From the Daily Beast: http://news.yahoo.com/greece-boils-over-120700059.html

Greek Parliament passes austerity measures - riots continue in the the streets of Athens

News and video from CNN:  http://www.cnn.com/2012/02/12/world/europe/greece-debt-crisis/index.html?hpt=hp_t1

The passage of the austerity measures will clear the way for the next round of funding for Greece, avoiding a messy default for now, but Greece will need to do even more cuts going forward in order to meet the demands of  Eurozone leaders, the IMF and ECB. 

From the New York Times "But the chaos on the streets of Athens, where more than 80,000 people turned out to protest, and in other cities across Greece reflected a growing dread — certainly among Greeks, but also among economists and perhaps even European officials — that the sharp belt-tightening and the bailout money it brings will still not be enough to keep the country from going over a precipice." More http://www.nytimes.com/2012/02/13/world/europe/greeks-pessimistic-in-anti-austerity-protests.html?_r=1&ref=world

A bleak view of the situation on the ground in Greece from a UK Guardian reporter in Athens:
http://www.guardian.co.uk/world/2012/feb/12/greece-cant-take-any-more

Critical Day for Greece - Parliament Votes on Austerity Measures

The latest from Yahoo! News:  http://news.yahoo.com/bailout-chaos-pm-papademos-tells-greece-005703038.html

As described by Fox news, "Greece is trapped in a lose-lose predicament: It must deepen an austerity plan begun in 2010 that will throw many more people out of work. Or it must default on its debts, abandon Europe's single currency and see its banking system implode."

Read more: http://www.foxnews.com/us/2012/02/11/greeces-grim-choice-deep-budget-cuts-or-default/#ixzz1mB0qJcCp
For video on the story go to CNN:  http://www.cnn.com/2012/02/12/world/europe/greece-debt-crisis/index.html?hpt=wo_c1

Greece currently has an unemployment rate of 21%, much higher for young people.  Austerity measures already introduced have led to businesses closing and government workers losing their jobs.  Protests are likely to continue, only deepening the crisis for Greece's economy.

Greek crisis reaches a boiling point

Eurozone finance ministers have rejected the latest agreement on Greek debt, pushing for more austerity measures, and setting off major protests in Athens.

From Gavin Hewitt at the BBC -- Greece Euro Crisis:  Most Dangerous Moment

Greece has until Sunday to come up with a plan -- or perhaps to decide to leave the Euro.

From the Guardian -- Greece crisis reaches boiling point

Romania, Greece and the Euro Crisis

Romania's government is the latest to fall due to the imposition of strict austerity measures due to the current fiscal crisis in Europe:  http://www.csmonitor.com/World/Europe/2012/0206/Now-Romania-Another-European-government-falls-amidst-eurocrisis

Greece's debt talks dragged on for another day, but were expected to conclude soon: http://www.ajc.com/business/greek-debt-talks-drag-1336259.html

Citizenship, Europe and the Financial Crisis

Peter Schuck of Yale Law School has written an interesting editorial about the EU and the limits of European Citizenship in the Huffington Post:  Citizenship and the Financial Crisis in Europe

Nationalism has been on the rise in Europe, with far right parties gaining ground in places like Sweden, the Netherlands, and continuing their support in Denmark and France. These developments are having an impact on approaches to citizenship and immigration.  There appears to be an interaction between the fiscal crisis and nationalism, but many of these trends started to develop long before the fiscal crisis hit in 2007-2008.  Scotland's potential bid for independence and developments in Hungary are an indication of the response to supranationalization and the lack of a conception of EU citizenship and identity. The Hungarian government has taken the country to the brink of bankruptcy in its bid to consolidate political power in the face of EU disapproval. The ideas of citizenship and solidarity are going through change, but can Danes or Germans identify with Greeks or Spaniards and was this ever a realistic goal?