Monitors check-in: The Athens Hilton
During Greece’s first and second bailouts they were known as the “troika”: three bureaucrats in suits endlessly following each other into a Greek government ministry in local television news clips.
Then they began slipping into buildings by a side door, protected by security guards to avoid anti – austerity protesters blocking the main entrance
Then they vanished altogether, banned from visiting Athens by the leftwing Syriza-led government.
Even their name was officially deleted: the troika became the “institutions” after their employers – the European Commission, the International Monetary Fund and the European Central Bank.
Now, after six months of being non – persons in Greece, the bailout monitors are back. Read more
Alexis Tsipras and Vladimir Putin at a meeting in the Kremlin in April
We learned on Monday that Yuri Milner, the billionaire Russian entrepreneur, is to spend $100m of his own money over the next 10 years to fund a project searching for alien civilisations beyond our solar system.
According to my calculations, that is $100m more than the Russian government has offered in financial aid to Greece since the radical leftist Syriza party, often presumed to be close to Moscow, came to power in January.
During Syriza’s chaotic six months in office, the notion has cropped up time and again that Alexis Tsipras, the prime minister and party leader, would like to play a ‘Russian card’ to ward off pressure from Greece’s eurozone creditors.
There is something to this, but the picture is more subtly textured than first impressions might suggest. Let’s look below the surface and find out what’s going on. Read more
Europe’s moment of decision on Greece
Is this week finally the one when Greece defaults on its debts and crashes out of the euro? Gideon Rachman is joined by Henry Foy and Ferdinando Giugliano to discuss an apparent hardening of opinion among Europe’s politicians towards Greek appeals for debt relief.
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
This week Greece finally put a figure on its demand for war reparations from Germany – €278.7bn as compensation for the death and destruction visited by the Nazis during the war. Opinion polls suggest that this gambit is widely popular in Greece. But by bringing this issue up now, the Greek government may have made a serious miscalculation that could contribute to the country’s disorderly exit from the euro.
Greece’s reparations demand comes at a time when the government in Athens is running out of money and its creditors are running out of patience. The country is likely to need a new bailout package this summer. By putting the reparations issue on the table, the Greeks may feel they gain extra leverage – as well as the possibility that they will actually get debts written off, rather than simply extended. But they have also significantly raised the risk that the Germans will simply walk away from the table altogether – forcing Greece into a default and a disorderly exit from the euro. Read more
Is Bild going soft on Greece? After weeks spent hammering Athens over its debt-fuelled profligacy, the top-selling German tabloid has laid out the welcome mat for Greek prime minister Alexis Tsipras for his first visit to Berlin.
“Willkommen in Deutschland, Herr Tsipras,” said Bild in a front page banner headline published hours before the radical leftist was due to meet chancellor Angela Merkel over dinner later on Monday. And just to make sure the visitor got the message, the paper filled the bottom half of its front page reproducing the headline in Greek. Read more
The stable of fictitious beasts from Greek mythology acquired a new inmate this week, unveiled in the letter from the Syriza government proposing economic reforms to keep the country’s bailout going. Yanis Varoufakis, the finance minister, has bravely set off in search of that wondrous creature: “EU best practice across the range of labour market legislation”.
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 eurozone is mired in a stand-off over Greece’s government debt which, at roughly 175 per cent of gross domestic product, is the highest in the currency union. But new data released on Tuesday make one wonder whether member states should stop worrying about Athens’ fiscal woes and start being concerned about… Berlin’s. Read more
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
Less than a week into his new job, Greece’s finance minister is already performing the kolotoumbes, or policy somersaults, anticipated by several Athens commentators.
Yanis Varoufakis, an eloquent economics professor, has removed a key plank of the leftwing Syriza party’s pre-election platform: its longstanding demand that creditors should write off at least one-third of Greece’s huge public debt, which last year amounted to 175 per cent of national output.
Visiting London on Monday, the second stop of a tour of European capitals, Mr Varoufakis told the Financial Times that Athens would restructure its entire public debt by swapping bailout loans for new growth-linked bonds and issuing what he called “perpetual” bonds to replace Greek bonds owned by the European central bank.
The U-turn on the debt issue was so abrupt that some observers wondered whether Mr Varoufakis went off-message as he tried to reassure Greece’s eurozone partners and City investors that the Syriza-led government was serious about meeting its obligations to the EU and International Monetary Fund. Read more
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
Greece’s parliamentary elections on Sunday are set to put in power the nation’s most leftwing government, led by the radical Syriza party, and its youngest prime minister, 40-year-old Alexis Tsipras, since the second world war.
But some familiar names and faces will survive Syriza’s expected victory. Despite six years of economic slump, and despite the reappearance of serious concerns about Greece’s ability to stay in the eurozone, the old Greek political order is not about to be swept away in its entirety. Read more
Greece’s latest annual survey of living standards, published on Monday by the country’s independent statistical agency Elstat, highlights the deepening impact on households of a wrenching six-year recession. Some figures leap off the page, even though observers in Athens are used to a flow of gloomy statistics. Read more
The consensus, such as it is, on the eurozone crisis was neatly summed up on Monday by Hugo Dixon, author and editor at large of Reuters News: “The euro crisis is sleeping, not dead.”
What about the crisis in Greece? Over the past four to five years Europe, supported by the International Monetary Fund, has invested more time, effort and money in Greece than in any other struggling eurozone state. The aim is to reform a country so inefficiently governed, so riddled with corruption and so burdened with debt that it seemed, for certain spells in 2011 and 2012, to pose a threat to the eurozone’s survival.
So it seems reasonable to ask: if this time, effort and money have not changed Greece for the better, what has it all been for? Read more
• Putin is proving his skills as Russia’s great propagandist, with his use of Soviet-era symbolism alarming those fearful for the country’s democracy.
• The Ukraine stand-off offers Beijing a broader role on the global stage.
• The FT’s series on the Fragile Middle continues, with a look at how India‘s petty entrepreneurs face an uncertain future.
• About to take over a crisis-ridden company with a demoralised workforce? Look no further the Vatican under Pope Francis for a case-study in how it should be done.
• As forests of empty new housing towers fill the horizon in Chinese cities, yet more state sanctioned construction would amount to yin zhen zhi ke – “drinking poison to quench one’s thirst”.
• Mukhtar Ablyazov, a former banker accused of fraud and one of the Kazakh president’s main political opponents, says the UK is being manipulated by a kleptocratic dictator after London decided to revoke his asylum status. Read more
By Luisa Frey
♦ Will the Palestinian economy ever be able to break its isolation? The past two decades’ rounds of failed peace talks didn’t manage to build an independent Palestinian economy which can break free of Israel – the question is now if a new $4bn plan to revive the economy will be able to change that.
♦ Tests taken from Yasser Arafat’s corpse have shown high levels of radioactive polonium-210, suggesting the former Palestinian leader could have been poisoned. Arafat’s widow describes it as “the crime of the century”.
♦ External pressure is also threatening Georgia. The FT’s Neil Buckley reports about the “borderisation” of South Ossetia.
♦ Greece may be the next Weimar Germany, says Greek professor Aristides Hatzis. The parliament contains neo-Nazis, Stalinists, Maoists, populists and defenders of conspiracy theories. Although there is a strong coalition government, failures in implementing reforms seem to be outweighing successes.
♦ Meanwhile, “power, prestige, and influence of the United States in the broader Middle East is in a death spiral”, writes Bob Dreyfuss. He argues in Le Monde Diplomatique that the disastrous invasions of Afghanistan and Iraq, America’s economic crisis and the Arab Spring contributed to the decay of American influence.
♦ The future of the US-Egyptian relationship is also in focus. Washington’s establishment of relations with former Egyptian President Gamal Abdel al-Nasser “can serve as the most promising template for a stable and productive relationship between the two countries today”, says Robert Springborg in Foreign Affairs.
♦ Peter Baker, from Foreign Policy, writes about how the warm Russian-American relationship became icy. Through interviews and secret notes and memos, he reconstructs the story of former President George W. Bush’s pas de deux with Vladimir Putin, offering lessons for Obama as he struggles to define his own approach to Russia.
The arrest of the leader and deputy leader of Golden Dawn – alongside other Golden Dawn MPs and party members – has been greeted with applause by liberals inside and outside Greece.
There is little doubt that Golden Dawn is a genuinely nasty party whose members are guilty of rhetorical and actual violence against immigrants and whose leadership revels in paramilitary and fascist imagery. All those who fear that economic turmoil will undermine Greek democracy have been able to point to the gains made by Golden Dawn.
And yet, while the party is undoubtedly authentically horrible, I wonder whether the crackdown is really such a great idea. Mass arrests of legitimately elected politicians should always spark unease. As several commentators have pointed out, the last time this kind of thing happened in Greece was after the fall of a military junta, in 1974. Read more