By Gideon Rachman
As I read the umpteenth article on the “Grexit”, a phrase from the film ‘Marathon Man’ ran around my head. In this cult-thriller, Laurence Olivier plays a war criminal turned dentist who tortures Dustin Hoffman by drilling through his dental nerves without anaesthetic. As he does so, he asks repeatedly “Is it safe?”
Growth vs austerity in the eurozone
The growth vs austerity debate has been a focal point of eurozone politics over the past weeks. With voters in France and Greece appearing to reject austerity in this weekend’s elections, are we beginning to see a shift in policy from austerity towards spurring growth? Ralph Atkins, Hugh Carnegy, Chris Giles and Ben Hall join Shawn Donnan to discuss.
By Gideon Rachman
In rural France on Sunday night, the newly-elected French president took to the stage and announced that he would lead the battle in Europe against austerity. On the other side of the continent, Greek voters were calling his bluff. By overwhelmingly opting for parties that want to either repudiate or renegotiate Greece’s bailout deal, they have handed François Hollande a painful dilemma. Will he stand with the Greek people against austerity? Or will he stand with the German government and the International Monetary Fund, in insisting that the Greek bailout cannot be renegotiated?
By Gideon Rachman
Spanish unemployment is nearing 25 per cent. The suicide rate is climbing in Greece. Britain is in a double-dip recession. Amid all this pain, the cry is growing louder. Austerity policies in Europe are dangerous. Someone has to stop this madness.
Austerity backlash in Europe and UN monitors in Syria
As the Dutch government falls, a socialist wins the first round of the French presidential election, and the UK slides back into recession, Brussels bureau chief Peter Spiegel and Europe editor Ben Hall discuss the backlash against Europe’s austerity politics.
Michael Peel reports from Syria on the progress of UN monitors in the country, and diplomatic editor James Blitz looks at how the West’s intervention could be made more effective.
Welcome back to our live coverage of the eurozone crisis. By Tom Burgis and Esther Bintliff on the news desk in London with contributions from our correspondents around the world. All times GMT.
18.58 That’s about it for the live blog today. Follow FT.com through the evening for all the news from the summit and analysis of the day’s developments. Before we go, a quick recap:
And we leave you with a little light reading on the travails of Greece and one line — perhaps unfair, given today’s progress — that’s been raising wry smiles on Twitter.
18.55 As expected, Herman Van Rompuy is elected for another term as president of the European Council.
18.18 Now the finance ministers have done their work — well, some of it — it’s over the Europe’s leaders for the summit proper. Once again, all lenses on Germany’s Angela Merkel.
Angela Merkel arrives at the EU summit in Brussels (Photo: AP)
17.58 Earlier, Bill Gross, the manager of Pimco, the world’s largest bond fund, was to be heard fulminating against ISDA’s decision not to deem the Greek restructuring a “credit event”, thereby preventing credit default swaps from paying out (15.27).
Our hawk-eyed colleagues at FT Alphaville have, however, been studying the list of the ISDA members that voted unanimously against calling a credit event. Check the last name….
Welcome back to our continuing coverage of the eurozone crisis.
After more than 13 hours of talks, a second bail-out for Greece was agreed early on Tuesday morning. We’ll be bringing you reaction to the deal throughout the day. All times are GMT. By John Aglionby, Leyla Boulton and Tom Burgis on the news desk in London.
We’re going to wrap up now since, after getting no sleep last night, diplomats and officials across the eurozone appear to be heading home while Athens remains abuzz with how it will meet its side of the second Greek bail-out. To recap today’s highlights:
“Outside” being the WTO, in this case.
Dave Camp and Max Baucus, Congress’s two top dogs on trade, want the administration to try to make currency misalignment a WTO matter (originally Brazil’s idea). Good luck with that one. Since the WTO works by consensus, China can block this issue on its own. Regarding the renminbi, the consultancy fees for working out just how undervalued is undervalued would put international economists’ kids through college for decades to come.
So what’s going on here? Possibly the creation of a distraction in an attempt to forestall currency legislation on the Hill. Camp doesn’t like it, and although Baucus voted for it last year, he would probably be secretly happy to see it stalled indefinitely, not being a confrontationist firebrand. If Congress decides to pass a bill to fix this awkward example of judicial meddling in the near future, it could provide a vehicle on which China-bashers can attach some more radical legislation.
The conventional wisdom is that when the economy picks up and unemployment comes down, trade and currency disputes generally abate. On the other hand, there is an election coming up, and POTUS gave a pretty clear indication in the State of the Union that he thinks that warming up the old protectionist rhetoric from four years ago might play well in the Midwestern swing states. Don’t hold your breath for a currency deal coming out of Geneva – Capitol Hill is the real battleground for this one.
Yesterday, I was in Berlin where the temperature was -9. Today, I’m in Moscow – where its -19. But that’s enough about the weather, and about Russia (for now). It was an interesting time to spend a couple of days in Berlin, coming just after the EU summit, so let me summarise my impressions on where Germany stands on the euro-crisis.
Havana may be a looking-glass kind of place. Still, occasionally its
topsy-turvey view of the world can force you back to first principles.
Take the eurozone crisis. One country, Germany, wants to assume the role of budget overlord in the economic area. Member states will also be subject to strict economic criteria set from an unelected central authority – in this case Brussels.
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