02-10-2017, 11:04 PM
*** 11-Feb-17 World View -- Grexit risk: Greece may refuse a new round of austerity
This morning's key headlines from GenerationalDynamics.com
****
**** Grexit risk: Greece may refuse a new round of austerity
****
![[Image: g170210b.jpg]](http://www.GenerationalDynamics.com/ww2010/g170210b.jpg)
Hundreds of firefighters in uniform in Athens protest working conditions on Wednesday (AP)
Years before the term "Brexit" was invented, referring to Britain
leaving the European Union, people were talking about a possible
"Grexit," referring to Greece leaving the euro currency and returning
to its old drachma currency. As Greece enters new negotiations with
its lender for another bailout loan, some people are suggesting that
Grexit may be a reality this time.
Greece faces a €7.5 billion debt repayment in July. In order to
meet that payment, Greece's lenders -- the European Central Bank
(ECB), the European Commission (EC), and the International Monetary
Fund(IMF) -- will have to lend Greece more money. (This is like
borrowing from your MasterCard to pay your Visa.)
So there's plenty of time to negotiate an agreement by July, and
that's why the lenders are meeting with Greece now. Unsurprisingly, a
meeting on Friday in Brussels failed to reach an agreement after five
hours.
According to Dutch Finance Minister Jeroen Dijsselbloem:
> [indent]<QUOTE>"We made substantial progress today and are close to
> common ground for the mission to return to Athens in the coming
> week. [All sides have] a clear understanding that a timely
> finalization of the second (bailout) review is in everybody’s
> interest."<END QUOTE>[/indent]
So there'll be more meetings next week in the hope of reaching a
breakthrough by the next meeting of eurozone finance ministers on
February, but no really expects that either. In fact, it's unlikely
that the impasse will be broken before the very last moment, and that
would be just before the debt payment is due in July.
However, there are other kinds of deadlines that come sooner. There
will be elections in the Netherlands on March 15 and in France in
April through June. It would be nice to get a final settlement before
those elections, since the election results may force the negotiations
to start from the beginning.
The creditors are demanding that Greece increase its budget surplus
from 2% of GDP in 2017 to 3.5% in 2018. This would require more tax
increases, broadening the tax base, and more cuts in pensions. But
many in Greece's government are saying enough is enough. Pensions
have already been cut 11 times since the onset of the crisis in 2010,
and the government is refusing to cut them further.
The Greek people may be unwilling to tolerate any more austerity. If
Greece's prime minister Alexis Tsipras goes along with the pension
cuts, then his government may lose a vote of confidence, forcing new
elections before July. Greece's bond yields are also beginning to
spike up to crisis levels, indicating that investors are getting very
nervous about Greece again, just like the old day. And in that case,
Grexit may really occur this time.
So things are still pretty calm, but don't be surprised if the old
days come back, and there are several weekly crises to navigate.
Kathimerini and AP and Nasdaq
Related Articles
****
**** Greece will evacuate 75,000 people in Thessaloniki to defuse WW II bomb
****
A state of emergency has been declared in Thessaloniki and surrounding
municipalities after a 500-pound unexploded World War II bomb was
found during work to expand underground fuel storage tanks.
The bomb was dropped during an air raid in the city on September 17,
1944, around lunchtime. It was dropped by British and American planes
targeting rail facilities held by the Nazis.
Around 72,000 residents will be subjected to a forced evacuation
before the bomb disposal unit will start its operation on Sunday
morning. The evacuation zone will be 2 km (1.2 miles) around the
bomb. This will be the biggest evacuation in Greece since World War
II. At first the team will remove the detonator and will then
transport the bomb to a firing range for controlled explosion.
AP and Russia Today
KEYS: Generational Dynamics, Greece, Grexit,
European Central Bank, ECB, European Commission, EC,
International Monetary Fund, IMF, Jeroen Dijsselbloem,
Alexis Tsipras, Thessaloniki
Permanent web link to this article
Receive daily World View columns by e-mail
Contribute to Generational Dynamics via PayPal
John J. Xenakis
100 Memorial Drive Apt 8-13A
Cambridge, MA 02142
Phone: 617-864-0010
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com
Forum: http://www.gdxforum.com/forum
Subscribe to World View: http://generationaldynamics.com/subscribe
This morning's key headlines from GenerationalDynamics.com
- Grexit risk: Greece may refuse a new round of austerity
- Greece will evacuate 75,000 people in Thessaloniki to defuse WW II bomb
****
**** Grexit risk: Greece may refuse a new round of austerity
****
Hundreds of firefighters in uniform in Athens protest working conditions on Wednesday (AP)
Years before the term "Brexit" was invented, referring to Britain
leaving the European Union, people were talking about a possible
"Grexit," referring to Greece leaving the euro currency and returning
to its old drachma currency. As Greece enters new negotiations with
its lender for another bailout loan, some people are suggesting that
Grexit may be a reality this time.
Greece faces a €7.5 billion debt repayment in July. In order to
meet that payment, Greece's lenders -- the European Central Bank
(ECB), the European Commission (EC), and the International Monetary
Fund(IMF) -- will have to lend Greece more money. (This is like
borrowing from your MasterCard to pay your Visa.)
So there's plenty of time to negotiate an agreement by July, and
that's why the lenders are meeting with Greece now. Unsurprisingly, a
meeting on Friday in Brussels failed to reach an agreement after five
hours.
According to Dutch Finance Minister Jeroen Dijsselbloem:
> [indent]<QUOTE>"We made substantial progress today and are close to
> common ground for the mission to return to Athens in the coming
> week. [All sides have] a clear understanding that a timely
> finalization of the second (bailout) review is in everybody’s
> interest."<END QUOTE>[/indent]
So there'll be more meetings next week in the hope of reaching a
breakthrough by the next meeting of eurozone finance ministers on
February, but no really expects that either. In fact, it's unlikely
that the impasse will be broken before the very last moment, and that
would be just before the debt payment is due in July.
However, there are other kinds of deadlines that come sooner. There
will be elections in the Netherlands on March 15 and in France in
April through June. It would be nice to get a final settlement before
those elections, since the election results may force the negotiations
to start from the beginning.
The creditors are demanding that Greece increase its budget surplus
from 2% of GDP in 2017 to 3.5% in 2018. This would require more tax
increases, broadening the tax base, and more cuts in pensions. But
many in Greece's government are saying enough is enough. Pensions
have already been cut 11 times since the onset of the crisis in 2010,
and the government is refusing to cut them further.
The Greek people may be unwilling to tolerate any more austerity. If
Greece's prime minister Alexis Tsipras goes along with the pension
cuts, then his government may lose a vote of confidence, forcing new
elections before July. Greece's bond yields are also beginning to
spike up to crisis levels, indicating that investors are getting very
nervous about Greece again, just like the old day. And in that case,
Grexit may really occur this time.
So things are still pretty calm, but don't be surprised if the old
days come back, and there are several weekly crises to navigate.
Kathimerini and AP and Nasdaq
Related Articles
- Greece financial crisis threatened after Tsipras announces new spending program (15-Dec-2016)
- Workers riot as Greece braces for new austerity measures (09-May-2016)
- Alexis Tsipras' far-left Syriza party wins historic election in Greece (26-Jan-2015)
****
**** Greece will evacuate 75,000 people in Thessaloniki to defuse WW II bomb
****
A state of emergency has been declared in Thessaloniki and surrounding
municipalities after a 500-pound unexploded World War II bomb was
found during work to expand underground fuel storage tanks.
The bomb was dropped during an air raid in the city on September 17,
1944, around lunchtime. It was dropped by British and American planes
targeting rail facilities held by the Nazis.
Around 72,000 residents will be subjected to a forced evacuation
before the bomb disposal unit will start its operation on Sunday
morning. The evacuation zone will be 2 km (1.2 miles) around the
bomb. This will be the biggest evacuation in Greece since World War
II. At first the team will remove the detonator and will then
transport the bomb to a firing range for controlled explosion.
AP and Russia Today
KEYS: Generational Dynamics, Greece, Grexit,
European Central Bank, ECB, European Commission, EC,
International Monetary Fund, IMF, Jeroen Dijsselbloem,
Alexis Tsipras, Thessaloniki
Permanent web link to this article
Receive daily World View columns by e-mail
Contribute to Generational Dynamics via PayPal
John J. Xenakis
100 Memorial Drive Apt 8-13A
Cambridge, MA 02142
Phone: 617-864-0010
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com
Forum: http://www.gdxforum.com/forum
Subscribe to World View: http://generationaldynamics.com/subscribe
