By Gideon Rachman
Watching the Greek crisis unfold, I found myself torn between two equal and opposite thoughts. First, the euro cannot survive. Second, everything must be done to save the euro.
The election by parliament of Prokopis Pavlopoulos, a centre-right former cabinet minister, as Greece’s new president on Wednesday night has sparked criticism from members of the governing Syriza party’s far-left faction who wanted to see an “anti-austerity” politician in the largely ceremonial post of head of state.
Puzzled Syriza voters wondered how Mr Pavlopoulos could have been adopted as the candidate of a government that wants to get rid of outdated political practices, given his track record while in office. Read more
The scenes of chaos during President Jacob Zuma’s speech at the opening of South Africa’s parliament last week will be remembered as one of the darkest days of the post-apartheid era
Visitors from the Chinese mainland to Hong Kong are known as “locusts” and now a long-simmering resentment at their presence in the territory is boiling over into angry protests
Greece must impose capital controls or repeat the costly mistake of Cyprus, where emergency funding from the ECB was spirited out of the country, argues Hans-Werner Sinn
What Isis Really Wants: The Islamic State is no mere collection of psychopaths. Here’s what its beliefs means for its strategy – and how to stop it (The Atlantic)
Washington’s uneasy partnership with Tehran now extends to Yemen (Foreign Policy) Read more
Are Europe’s politicians ready to contemplate Grexit?
Gideon Rachman is joined by Ferdinando Giugliano and Stefan Wagstyl to discuss the growing stand-off between Greece and its eurozone creditors as the language becomes more uncompromising on both sides. What would happen if Greece left the eurozone and are politicians prepared to contemplate such an outcome?
If there was any doubt that the forthcoming negotiations between Greece’s new Syriza government and its eurozone creditors would be fiery, Greek prime minister Alexis Tsipras dispelled them in his barnstorming speech to his parliament on Sunday night.
His defiant rhetoric will have gone down well not just in Greece but also with some of the political left in Europe and beyond. Some politicians and commentators have elevated the dispute between Athens and the rest of the eurozone – usually shortened to Greece vs Germany – as a battle between the progressive and reactionary forces for the soul of Europe, a fiscal Spanish Civil War for the 21st century. Read more
The term “voodoo” economics was originally aimed at the Reaganite right – and, specifically, their belief that cuts in taxes would pay for themselves through the higher growth they generated. Now, in Greece, the new Syriza government has come up with a left-wing version of voodoo economics: the belief that a spending splurge will pay for itself, if it is just pushed with enough energy and determination. Unfortunately, given that Greece’s starting point is immeasurably weaker than that of the US in 1980, the Greek experiment with voodoo economics is likely to come crashing down – and quickly. Read more
A former colleague on the FT (no names, but he now runs the UK’s Office for Budget Responsibility) used to muse that a useful all-purpose headline for any story about an emerging market economy was “[Insert Name Of Country Here]: Structural Reform?”
Putting “Greece” into that formula after Syriza’s resounding victory in Sunday’s election, where do we stand? Every pundit in Europe is retailing some version of the insightful observation that it is all about whether Syriza — and its leader, Alexis Tsipras, Greece’s new prime minister (above) — can be induced to do enough structural reform to buy the fiscal leeway and debt relief it wants.
The problem with this view is that “structural reform” is a crude and unhelpful term. Read more
By Gideon Rachman
Syriza have won the Greek election. But, perhaps just as startling, the “far left” party is making considerable headway in the struggle to win over elite opinion in the west.
The triumph of the anti-austerity Syriza party in Greece’s general election has put back on the table the vexed question of what to do with Athens’ debt. Economists tend to disagree over how sustainable this burden really is: some point to the sheer size of the liabilities, saying Athens will never be able to pay them back. Others emphasise the favourable conditions which the Greek government has secured on official sector loans in two rounds of restructuring: these include heavily subsidised interest rates and a lengthening of the average maturity of the debt, which now stands at 16.5 years, double Italy’s or Germany’s.
One figure on which everyone tends to agree, however, is that Greece’s public debt is 177 per cent of gross domestic product, the highest level in the eurozone. Well, everyone but a private equity group and a number of accountants, who think the relevant figure could be as low as 68 per cent. Read more
Here’s one prediction if Alexis Tsipras and his radical left Syriza party win Sunday’s Greek parliamentary elections: 595 women with mops and rubber gloves are going to be very happy.
They are cleaners whom the outgoing government, led by Antonis Samaras of the centre-right New Democracy party, fired from their jobs at Greece’s finance ministry as part of its effort to cut public expenditure and root out clientelism.
The cleaners’ dismissal caused a right old uproar in Athens. Mr Tsipras, terming their treatment typical of callous measures adopted to please Greece’s EU and International Monetary Fund creditors, has promised to reinstate them.
Everyone I’ve met this week in the Athens political world is sure he will do exactly what he says. Long live the revolution! Read more