A man pushes a trolley with recyclable materials past graffiti in central Athens

Spectators of the debt drama starring Greece and its eurozone creditors are shuffling uncomfortably in their seats. They do not know the ending, but every twist in the plot suggests that it is extremely unlikely to be happy.

The Greek state is slipping closer to official default on its loans, and even exit from the eurozone. This creates an impression that the drama, which began in 2001 with the fatal decision to admit Greece into Europe’s monetary union, is approaching a sort of Act V dénouement. But real life is not a play, when the curtains come down after a fixed period of action.

Some high-level eurozone politicians – by which I mean prime ministers and finance ministers – have made it clear for at least five weeks that they are ready to let Greece default and, if necessary, drop out of the 19-nation currency area. Yet not all have thought hard enough about what might follow. To say “good riddance to the Greeks, they’ve been unreliable and irresponsible, we’ll be better off without them” does not amount to a serious policy. Read more

By Gideon Rachman
When the radical left won power in Greece in January much was made of the fact that Yanis Varoufakis, the new finance minister, is an academic economist. Many expected that Greece’s negotiating strategy would display a new subtlety and brilliance, now that it was guided by the co-author of Game Theory — A Critical Introduction.

Greek bailout negotiators have come up with a set of revenue-raising projections for 2015 and 2016 that troubles even the most optimistic Athens economist.

The leaked eight-page proposal published by Kathimerini includes administrative measures aimed at raising €1.6bn in the second half of this year and €2.3bn next year and include the following measures: Read more

  • Greece cannot lose by rejecting this week’s final offer from international creditors – and leaving the eurozone would achieve a better outcome for its economy, argues Wolfgang Münchau
  • Foreign companies are finding ways of circumventing economic sanctions on Russia, enabling the provision of goods and services like banking to blacklisted entities
  • As the government in Athens fast runs out of money – and nervous depositors pull cash from the country’s banks – there is growing talk of the extraordinary use of capital controls in Greece
  • A documentary shows how the poorly-trained and equipped Kurdish peshmerga forces are the international coalition’s only reliable boots on the ground in northern Iraq (Vice Media)
  • A Chinese entrepreneur who took just 19 days to build a 57-storey tower says he has triggered a construction revolution. And his dreams soar far, far higher (BBC)

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Turkey’s dramatic change of direction
Turkey’s dramatic election results have set back the political ambitions and increasingly personalised rule of President Recep Tayyip Erdogan. Gideon Rachman discusses what this means for the country’s future with Daniel Dombey and David Gardner.

The president of the World Bank has warned that a pandemic could kill tens of millions people and wipe out between 5 to 10 per cent of GDP of the global economy. Jim Yong Kim said in Frankfurt on Tuesday the world was “complete unprepared” for an outbreak on the scale of the Spanish Flu outbreak witnessed in 1918, which killed between 3 to 5 per cent of the world’s population at that time.

Quoting research commissioned by Bill Gates, founder of Microsoft, Dr Kim said a Spanish flu-like pandemic in the modern era would kill 33m people in 250 days. The recent Ebola outbreak had, the former physician, who has headed the World Bank since 2012, said, “revealed the shortcomings of international and national systems to prevent, detect, and respond to infectious disease outbreaks.”

It was also, according to Dr Kim, by far the biggest risk to the global economy. Read more

It is possible, of course, that the Greek crisis will once again derail their plans. But as things stand, one subject under discussion at a Brussels summit of European leaders on June 25-26 will be how to improve economic governance in the 19-nation eurozone.

The most succinct explanation for why Europe’s leaders must get their act together on economic governance appeared in a speech last November at the University of Helsinki by Mario Draghi, the European Central Bank president. He said: “Doubts over the viability of EMU [European monetary union] will only be fully removed when we have completed it in all relevant areas. This means banking and capital markets union; it means economic and fiscal union. In a monetary union, no policy area can be seen in isolation.”

What a shame that these fine words, and various thoughtful proposals for enhanced eurozone integration that are circulating in EU capitals, appear likely to produce next to nothing in terms of concrete progress at the Brussels summit. It will be a wasted opportunity – or, to put it more strongly, yet another wasted opportunity. Read more

By Richard McGregor in Washington

In the confrontational atmosphere pitting Beijing against Washington and its allies in Asia, it is often forgotten that China and much of the west were allies in the region’s defining wartime struggle, fighting their then mutual foe, Japan.

In September, Beijing is planning a massive military parade to remind the west and the rest of the world of that moment, the 70th anniversary of Japan’s surrender in the Pacific War. As commemorations go, it promises to be an awkward occasion. Read more

By Gideon Rachman
Neither man would appreciate the comparison, but Alexis Tsipras and David Cameron are in remarkably similar situations.

Will Italy’s regional poll results weaken Renzi’s reforms?
The government of Matteo Renzi has done badly in regional elections. Gideon Rachman and guests discuss whether his reformist project is now in trouble and what that would mean for the rest of Europe.

Keep an eye on Transnistria, the pro-Russian breakaway state in Moldova. On Monday, Dmitri Trenin, one of Russia’s best-known foreign policy analysts and a man with good Kremlin antennae, tweeted: “Growing concern in Moscow that Ukraine and Moldova will seek to squeeze Transnistria hard, provoking conflict with Russia.” On Tuesday, a columnist in the pro-Kremlin Izvestia newspaper warned that Russia “seriously faces the prospect of a repeat of the [2008] situation” – when it went to war with Georgia – “this time around Transnistria”.

What sparked the tensions was a May 21 vote in Ukraine’s parliament to suspend military co-operation with Russia. That included a 1995 agreement giving Russia military transit rights across Ukraine to reach Transnistria, which borders Ukraine’s Odessa region. Read more

Welcome to our live coverage of the European Central Bank President Mario Draghi’s press conference.

While we are not expecting quite the same excitement as six weeks ago when a protester jumped out from the journalists’ seating area yelling “end the dictatorship”, the eurozone economy is looking perkier, so many investors will be listening out for whether Mr Draghi strays into dovish or hawkish territory with his comments. The ECB kept its benchmark interest rate on hold at 0.05 per cent.

There will also be the inevitable focus on Greece, as bailout talks with creditors reach knife edge. Cash-strapped Athens is threatening to delay making a €305m loan repayment to the International Monetary Fund if there is no deal in the next few days.

By Ralph Atkins and Lindsay Whipp


The strange thing about Sepp Blatter’s resignation speech is how utterly uninformative it was. The only reason that the Fifa president gave for his resignation was that “I do not feel that I have a mandate from the entire world of football”. That much, however, must have been apparent to Blatter for some years – every time he picked up a newspaper or was booed in a football stadium.

So why did he go on Tuesday? My guess is that the crucial piece of information was that he himself is now under investigation by the US Department of Justice. Depending on the progress of the investigation, that could place him under threat of arrest every time he left Switzerland. And that would be an impossible position for the head of the world football governing body, whose job entails constant travel. Read more

Ali al-Naimi, the Saudi oil minister (centre), Bob Dudley the chief executive of BP (right), and Rex Tillerson, the ceo of ExxonMobil (left), are speaking at Opec’s international seminar about the oil market, ahead of Opec’s twice-yearly meeting on Friday in Vienna.

It is one of the few times in the year when senior representatives of the oil producers’ cartel share a podium with the heads of some of the world’s largest oil companies.

By Guy Chazan, Chris Adams and Lindsay Whipp


Ukraine President Petro Poroshenko (L) with Mikheil Saakashvili (C) in Odessa

Unlike Russia’s leaders, who loathe him, and unlike some of his western friends, who once treated him as if he were Georgia’s greatest hero since King Davit the Builder (1089-1125), I don’t hold strong views for or against Mikheil Saakashvili.

If pressed, I would say that, during his 2004-13 spell as president of Georgia, he displayed an impressive, but slightly frantic reformist energy in pursuing what he believed to be his country’s pro-western destiny. His modernising fervour combined indomitable self-confidence and business school English with an unpredictability and a capacity for misjudgment that at times bordered on recklessness.

I interviewed Saakashvili in Brussels in October 2008, two months after a short war in which Russia in effect partitioned Georgia by invading it and recognising the independence of the breakaway regions of Abkhazia and South Ossetia. He was more subdued than usual, possibly because it had dawned on him that in the build-up to that conflict he had fallen into a well-laid Russian trap.

Now, in the strangest of career twists, Saakashvili has been appointed governor of Ukraine’s southern region of Odessa by President Petro Poroshenko. The Ukrainian president has speeded up this move by granting Saakashvili instant Ukrainian citizenship. Read more

By Gideon Rachman
It is half-time in the match between the US justice system and Fifa. In the first half, the Americans took a shock early lead, with the unexpected arrest of several of Fifa’s leading players. But world football’s governing body struck back with a defiant equaliser — re-electing its discredited president, Sepp Blatter.

Christine Lagarde made headlines on Friday saying in a German press interview that Grexit was “a potential.”

Coming from the head of the International Monetary Fund, her words rightly caused a stir – even if they were little more than a statement of the obvious. Those charged with maintaining financial stability are not supposed to rock the boat, even if the water is already coming over the gunwales. Read more

There are drawbacks to being a satirist from a deeply authoritarian state. Exile is a frequent consequence. But it has its advantages.

“I’m really blessed as an Iranian comedian,” Kambiz Hosseini told the audience of democrats, dissidents and defectors who gathered this week in Norway for the annual Oslo Freedom Forum (or “Davos for dissidents”). “There’s no shortage of material for me.” Read more

Narendra Modi’s first year in office

Narendra Modi’s election a year ago was accompanied by hopes for economic regeneration but anxiety about his Hindu nationalist agenda. Gideon Rachman discusses the Indian prime minister’s first year in office with Victor Mallet and James Lamont.

It is 10,000 miles from Ireland to Australia but it didn’t take long for Ireland’s yes vote in favour of gay marriage to resonate in Canberra.

Within days of the referendum passing, the opposition Green and Labor parties have renewed a push for marriage equality by tabling legislation in parliament.

“Our current law excludes some individuals – and to me, that is unacceptable,” said Bill Shorten, Labor leader.

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