…Can the “big bazooka” that US politicians, in particular, like to invoke actually save the euro? Many economists are skeptical, because it is primarily economic imbalances that are creating ever-widening rifts between countries in the European currency area. The economic divide between the north, with its strong export economies, and the south, with its high consumption, has grown even further. At the same time, citizens are losing confidence in Europe’s ability to manage the crisis.
“Run for your lives” is the new motto in Europe, and not just among banks and insurance companies, which are selling off southern European bonds as quickly as they can, but also among ordinary holders of savings accounts. Banks and regulatory agencies are noticing that anxious citizens throughout Europe are trying to bring their money to safety. The flight of capital from Italy, Spain and Greece is in full swing.
…At the airport in Athens, passengers are often caught leaving the country with upwards of €100,000 in cash, well in excess of the €10,000 limit. This capital flight has triggered a boom in the European real estate market, especially in Berlin and London, where wealthy Greeks are buying second homes. >continue<
Sunday’s extraordinary cabinet session would be the crisis-hit leader’s last as prime minister, a government spokesman confirmed as cross-party talks to form a national unity government continued…
Debt-stricken Greece received a €110bn (£95bn) bailout in May 2010 with a further €130bn expected to be injected into its economy under the latest loan agreement agreed by EU leaders at an emergency summit on October 26.
The hard-won accord, which will also involve banks accepting a 50% “haircut” on their holdings of Greek debt, had been met with widespread fury in Greece where many in a population already hit by successive waves of belt tightening fear it will mean further austerity. >continue<
Der Spiegel | The World from Berlin
Papandreou’s announcement on Monday evening that he was planning to hold a referendum on the EU bailout package for his country has shocked and infuriated his would-be benefactors — and sent global markets into yet another tailspin.
The news came less than a week after an all-night bargaining session in Brussels that resulted in an agreement to slash Greek debt by 50 percent, make a further €130 billion in loans available to the country and leverage the EFSF to €1 trillion. Markets immediately calmed and the euro began climbing against the dollar.
German commentators on Wednesday take a look at the impending referendum. >continue<
The eurozone crisis is reaching its climax. Greece is insolvent. Portugal and Ireland have recently seen their bonds downgraded to junk status. Spain could still lose market access as political uncertainty adds to its fiscal and financial woes. Financial pressure on Italy is now mounting.
…the only realistic and sensible solution is an orderly and market-oriented – but coercive – restructuring of the entire Greek public debt. But how can debt relief be achieved for the sovereign without imposing massive losses on Greek banks and foreign banks holding Greek bonds? - Nouriel Roubini >read more<
The latest wave of Hellenic protesters call itself Aganaktismenoi, in the spirit of the Spanish indignados, a broad-based and non-party-political movement… How did it come to this? How fair is this charge of “Thieves”? Did Greek politicians simply loot their own country, and EU taxpayers, for personal gain? There is truth in this tale, but like any Greek tragedy, there are multiple narratives, none of them pretty.
…But their voices will have to be acknowledged, because the high-decibel volume reflects the scale of the crisis that confronts us all. As Thucydides observed, justice will not come to Athens until those who are not injured are as indignant as those who are. >continue<
The International Monetary Fund, still struggling to find a new leader after the arrest of its managing director last month in New York, was hit recently by what computer experts describe as a large and sophisticated cyberattack whose dimensions are still unknown.
The concern about the attack was so significant that the World Bank, an international agency focused on economic development, whose headquarters is across the street from the I.M.F. in downtown Washington, cut the computer link that allows the two institutions to share information. >continue<
It’s not presently clear if this is related to Anonymous calls to target the IMF. But as Arab Spring-esque demonstrations bloom across Southern Europe, incited in part by austerity measures - prompting some in Greece to call for a return to the drachma and default on the IMF’s “insupportable debt”, we may be witnessing an unparalleled form of blowback.
The IMF’s official job sounds simple and attractive. It is supposedly there to ensure poor countries don’t fall into debt, and if they do, to lift them out with loans and economic expertise. It is presented as the poor world’s best friend and guardian. But beyond the rhetoric, the IMF was designed to be dominated by a handful of rich countries – and, more specifically, by their bankers and financial speculators.
Somebody’s not waiting for the official proceedings to begin.