Thursday, 11 February 2010

Worth reading today

Brussels Blog
The FinanicalTimes' Brussels bureau chief, Tony Barber, reports that a rescue plan for Greece is all but certain at this European Summit. But what will Germany demand in return for bailing out its fellow eurozone member?
"Today’s European Union summit in Brussels will set out the framework for a financial rescue operation for Greece. This much is clear is from various briefings being given by officials from countries as varied as Austria, Lithuania, Poland and Spain.  But financial markets will have to wait until next week to see the full details of the plan."

Berlin and Paris urge backing for Greece
Financial Times: President Nicolas Sarkozy and Chancellor Angela Merkel are expected to give a show of political support to Athens at a summit of EU leaders in Brussels.

Franco-German bailout plan for Greece in the works
Kathimerini reports that France and Germany are leading efforts to formulate a bailout plan for the Greek economy. Talks went on late into Wednesday night, the paper reports, with the possibility of a 25 billion euro line of credit being mooted. Germany apparently raised the idea of an EU viceroy to oversee budget execution in Athens.
Prime Minister Yiorgos Papandreou reiterated from Paris his determination to see through the new Greek Stability and Growth Plan. "I assured [President Sarkozy] of our strong political will to implement to the letter the Stability and Growth Plan... and stressed that we have recently taken additional measures."
Spanish Prime Minister Jose Luis Zapatero said, "The countries of the eurozone will support Greece in this unprecedented crisis it is going through."

Greek civil servants strike over austerity plan
FT: Thousands of Greek civil servants on Wednesday staged a one-day strike and march to parliament in the largest protest to date against the government’s austerity measures. All domestic and international flights were cancelled for 24 hours as air traffic controllers at Athens airport – employees of the transport ministry – joined the walk-out. Bus and underground services shut down across the capital.

Ministers grudgingly accept the tax bill
Ministers grumbled about cuts in their respective portfolios at a cabinet meeting to put final touches to the tax bill yesterday, Eleftherotypia reports. Deputy Prime Minister Theodoros Pangalos apparently got Finance Minister Yiorgos Papakonstantinou to agree to except air force pilots from a cut in their benefits. In a reminder of the internal government tensions surrounding the stability plan, National Economy Minister Louka Katseli comlained that she was not invited to a single consultation. Papakonstantinou replied that this was because the tax bill was not in her jurisdiction. Katseli and Papakonstantinou share a building on Syntagma Square, but have divided their territory so as to work from separate floors.

A very European crisis
The Economist surveys Greece's structural and budget problems in a three-page briefing this week. "SOME would say that tragedy was inevitable from the moment, nine years ago last month, when Greece was admitted to the euro zone. Others would claim that woe was sure to befall such a disparate currency union sooner or later: if not Greece, then some other weak member of the club would have been the cause. Avoidable or not, trouble has arrived. At best, Greece has to undergo a dramatic budgetary tightening. Its fellow Europeans, or the IMF, may yet have to organise a humiliating bail-out."

The view from Turkey
Ioannis Grigoriadis, a Greek academic teaching at Bilkent University in Ankara, writes that Greece's liability to the European Union is seen by many Turkish commentators as comeuppance for favouritism. Greece should never have been admitted to the EU in 1979 on objective criteria, in this view. Europe is now paying the price. Grigoriadis also writes that the economic crisis Turkey underwent at the beginning of this decade fortified its currency and financial system. Many Turks are now calling for an opportunistic buyout of Greek interests, especially banks, in reciprocation of the National Bank's buyout of Turkey's Finansbank a few years ago.

Audio commentary
You can hear a discussion on the Greek economy in which I partook hosted by the show On Point on Boston's NPR member station:
and with the CBC here:

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