From Gary Jenkins at Swordfish Research:
Strange to think that over 100 million votes cast in the US may have less impact upon the markets over the next month or so than some 300 votes due to be cast in the Greek parliament this evening.
The Greek parliament will vote late Wednesday on the structural reforms and budget cuts demanded by the Troika. Reports suggest that the government will be able to get a majority. But in a last minute attempt to derail the vote, the country’s two main labour unions called a 48 hour general strike that started today.
These are the some of the scenes: Read more
There are some worrying signs about the strength of the Greek government coalition building this week. Between voting abstentions, public disagreements and new strikes, it’s looking ever bleaker. Read more
Greece’s new budget was announced on Wednesday. With it came projections for the country’s economic health. The patient is not well. Even before the government’s own-self assessment of conditions, revisions by the IMF alone revealed the deterioration, as Exotix’s Gabriel Sterne points out in a note on Thursday. More of his analysis further down, but first this from the FT on the Greek government’s figures: Read more
So, the Greek government has left this latest, very long, round of eurozone marriage counselling to head into, well, predictable domestic acrimony with headlines like “Crucial Test for Greek Coalition” trailing in its wake. From the ekathimerini:
“We did everything we could. We achieved significant improvements,” noting that Greece would remain in the euro if the package was passed and otherwise risked “descending into chaos.” “It is now down to the sense of responsibility of all political parties and each individual MP,” Samaras said.
Democratic Left issued a rejection within minutes, saying it does not agree with the outcome of negotiations with troika and repeating its objection to labor reforms.
JP Morgan’s Alex White points out that the next few weeks are going to be critical and that this one is likely going to the wire… again. Read more
It looks like Germany has decided that Greece hasn’t given up quite enough of its sovereignty yet. We know that Wolfgang Schaeuble wants to set up an escrow account to make sure loan installments stay out of Athens’ reach (in order to guarantee that debt repayments are made to creditors). But it seems that Berlin also wants to put any money from a Greek primary surplus into that account. Read more
Or peripheral pain in terms of growth/shrinkage in compensation per employee. It offers a striking illustration of why both Greeks and Germans have reason to feel peeved… Read more
We’re feeling very nostalgic. From the WSJ:
Euro-zone countries are considering a proposal that would see Greece cut its debt by buying back bonds held by private creditors at a discount.
The exercise–one of a number of options being studied–could persuade the International Monetary Fund to sign off on a loan payment desperately needed by the debt-laden country and keep Greece’s bailout on track for the medium term, two officials with direct knowledge of the discussions said Thursday.
The euro is dropping and Talthybius-wire has a few suggestions why. Our money is on the fugitive.
Clearly, the sense that Greece has stepped away from the brink of getting kicked out of the eurozone is the key driver, coupled with expectations that Brussels will give Athens a loan repayment extension.
Recent comments by eurozone officials quoted by Reuters that Athens could use funds from privatisations of state-owned assets to retire debt also don’t hurt:
“The privatisation process is finally kicking in, the structure is ready,” the official said. “You could expect a few billion euros from privatisation to buy back debt. This could happen relatively quickly.”
The debt swap plan seems to be working, then, but we wonder for how much longer… Read more
Non-german speakers should be able to guess the meaning, especially if we add the words ‘Greece’ and ‘Wolfgang Schaeuble’ by way of context.
Yes, Staatsbankrott = ‘state bankruptcy.’
Not that it’s going to happen in the case of Greece, of course — at least not according to the German finance minister. Read more
Greek unemployment hit a new record high of 25.1 per cent in July, having climbed for 35 straight months. It’s now more than double the eurozone average of 11.4 per cent and youth unemployment — between 15 and 24 years old — has hit 54.2 per cent. That’s scary and pretty hard to argue with but there is always a bit of context available.
A read for the train home from Buchheit (who helped mastermind the Greek restructuring at Cleary Gottlieb) and Gulati on the options now facing the eurozone’s sovereign debtors and those holding the purse strings.
Not too surprisingly:
[Their paper] concludes that there are no painless or riskless options. In the end, the question may come down to this — to what extent will the official sector sponsors of peripheral Europe be prepared to take on their own shoulders (and off of the shoulders of private sector lenders) a significant portion of the debt stocks of these countries during this period of fiscal adjustment?
Here’s the running order for Angela Merkel’s last? visit to Athens. Graphic courtesy of Bild.
Serious question.
What’s the justification for creating a three-ring security circus in the Greek capital, a general strike and quite possibly a major riot? Read more
Well, see if you can make out what they’re saying here.
Apparently that Greek shortfall is even bigger than the even bigger figure reported in the German press on Monday.
From Eurointelligence: Read more
France thinks Greece should get the two extra years that it’s been seeking to achieve the cuts outlined in its 2013-14 austerity programme.
The French PM: Read more
Unable to benefit from currency depreciation, the peripherals have been urged to seek other ways to improve their balance sheets by means such as ‘internal devaluation’ — regaining competitiveness by lowering costs, particularly wages.
One of the criticisms of “internal devaluation” is that it’s a slower method of improving competitiveness than an old fashioned currency devaluation. There are also questions about whether it even works. Read more
A quick guff-watch for Monday morning…
Athens, Greece – 17 September 2012 – In response to recent comments in the media, Coca-Cola Hellenic Bottling Company S.A. announces that, consistent with previous statements, it is seeking to better leverage its stock exchange listings. Read more
Hard to believe it was six months ago.
If you think the fat lady hasn’t yet belted it out on the possibility of future sovereign debt restructuring in the eurozone… (and who’d rule it out, ECB actions notwithstanding) Read more
There are two fairly important bits to this story in Der Spiegel.
One, that Merkel wants to avoid a Grexit for the time being and two, that the upcoming Troika report might be massaged to make that a reality. Read more
Click to enlarge.
Let’s start on a positive note on the volley of Markit PMI released Monday.
Spain’s PMI rose during August to 44, versus 42.3 in July… Read more
If you hit your head hard enough, you’re bound to start forgetting things.
“I’m really sick of this government giving away our taxes to those corrupt Greeks,” said the owner of a pet shop in Amsterdam who asked not to be identified by name because he does not declare all his income to the authorities.
How on Earth did we miss this last week, via Reuters? (H/T Pawelmorski) Read more
A reminder of why the ECB’s promise to “address” seniority in its new bond purchases matters so much (click to enlarge):
Ahead of Greek PM Antonis Samaras’ meeting with Angela Merkel on Friday we thought a look at Germany’s cast and position might be worthwhile… especially since the Greek leader is set to pitch for a two-year extension to meet fiscal targets set out in the loan agreement at that meeting.
The drum beat of Euro grandees hinting that Greece should just get out of the Eurozone is getting louder once more. Here’s former Bundesbanker Otmar Issing discussing the matter in simple language for the audience of CNBC…
Click to view. Read more
Older entries
1Bernanke weighs in on robot wars; brings Keynes for backup
2Secret liquidity and Scottish independence
3Spain's awful unemployment
4S&P 2,100, by Goldman Sachs
5Pump up, debase
Show more6Buyback to enrich
7Collateral crunch-counting gets sophisticated
8Everlasting credit, the long view
9Apple Operations International, facts (?) du jour
10In which the FTSE puts the crisis behind it
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