Greece

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

  • Golden Dawn is filling in the gaps in the Greek welfare system and establishing itself in society for the years to come.
  • Despite his “Demolition Man” nickname, Matteo Renzi has responded cautiously to recent scandals and it still seems that corruption is the norm in Italy.
  • China’s property bubble could really burst and Beijing’s resolve to avoid traditional stimulus programmes is unlikely to hold, says George Magnus.
  • The Telegraph interviewed 27 European immigrants about their experience living in the UK. They discuss whether immigrants take jobs from the British and the British love for beer.

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• 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

By David Gallerano
♦ Claire Jones outlines how any decision the Federal Reserve will take on tapering has implications far beyond the United States.
♦ Robin Harding takes stock of the situation regarding the nomination of the new Fed chairman. Though it seems the propitious moment for a Yellen selection, there is the chance that the White House might opt for a more thorough selection process. After all, Ben Bernanke’s appointment in 2005 did not come until late October
♦ Meanwhile, John McDermott reproaches Obama for his weak support of Lawrence Summers’ candidacy.
♦ The German elections will pave the way for a third bailout for Greece. How will the Greek economy react? Peter Spiegel outlines the most likely scenario.
♦ The Pacific Standard examines six reasons why Zambia is – and will probably remain for long time – a poor countryRead more

(Getty)

For campaign issues that Germany’s political elite had all but agreed to shy away from, the eurozone debt crisis in general and Greece in particular are proving remarkably capable of generating unscripted campaign trail surprises. Read more

♦ In Syria, loyalists proclaim their success, but there are plenty of reminders that their progress is limited and potentially reversible.
♦ In Egypt, critics accuse Mohamed Morsi and the ruling Muslim Brotherhood of ineptitude and authoritarianism that has damaged the economy and fuelled public discontent.
♦ Greece is struggling to avoid the collapse of a second big privatisation – bidders for the state gaming monopoly want to change the terms of a deal agreed last month.
♦ The New York Times looks at how Barack Obama engaged with Nelson Mandela’s history.
♦ The former second ranking officer in the US military is now the target of a Justice Department investigation into the leak of information about a covert US cyber attack on Iran’s nuclear programme.
♦ DNA testing has gained in popularity as people go searching for their African roots.
♦ Eric Lewis, a partner at an international litigation firm, argues based on the Supreme Court’s decisions this week that, “
Even with the jubilation surrounding the defeat of DOMA, this has been a strange and sad week for the Court and the nation.” Read more

Turkey
♦ Why was the Turkish media’s coverage of the protests so inadequate? – it is a “compromised media sector that is largely the property of conglomerates with wide-ranging interests, and a Turkish state that exercises particular sway over business life.”
♦ The protests have shaken Turkey but will not topple the prime minister, says Turkish journalist Mustafa Akyol.
♦ Protesters are using gaming lingo in their fight against the government.
Elsewhere
♦ Poetry magazine has dedicated their June issue entirely to poetry composed by and circulated among Afghan women.
♦ The IMF admits to errors in its handling of Greece’s first bailout. Here’s some context from FT Alphaville’s Joseph Cotterill.
♦ Take a look at the BBC’s view from Qusair, of a city that has disappeared. Read more

By Aaron Hagstrom

♦ An isolated village in northeast China has adopted an “eldercare” model, in which the old look after the even older.
Richard Beeston, the courageous Times correspondent who covered the 1991 Kurdish massacres in Halabja, has died of cancer at 50.
Pakistan’s “crumbling” railways have become an emblem of a troubled past.
Israeli finance minister Yair Lapid has returned to the limelight, in the wake of his unpopular austerity budget.
French chefs are turning from fresh to frozen ingredients, in the face of rising costs.
Researchers have shown the invention of the “humble” shipping container in 1956 explains a 790% rise in bilateral trade over 20 years.
Greece shows rising fertility rates, despite rising unemployment.
In the highest level of US-China military talks held for nearly two years, cybersecurity was the focus.

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♦ The FT argues today that Apple’s decision to borrow money in order to fund a dividend, despite being one of America’s most liquid companies, indicates a need for reform to the US tax system.
♦ Despite impressive economic growth, improvements in living standards in Malaysia have lagged behind those of its neighbours, building pressure for change ahead of Sunday’s election.
♦ North African governments are trying to stem the flow of young Islamic militants, heading to Syria to fight the regime.
♦ President François Hollande is struggling to please everyone and, in fact, anyone – leading to concerns that France might become the next European problem child. After a draft paper by the president’s party described Angela Merkel as “selfish”, Mr Hollande has had to reassure her that he still believes in a Franco-German relationship.
♦ William Finnegan discusses his article on Mark Lyttle, a US citizen from North Carolina who was deported to Mexico despite ample evidence that he was an American, and the soaring number of deportations.
♦ Dzhokhar Tsarnaev has told the FBI that he and his brother considered suicide attacks on July 4, but instead decided to strike on Patriots’ day.
♦ Politics and vetting processes mean that Barack Obama has yet to fill some long-empty posts in his cabinet.
♦ Evangelical Christians in California have struck up a debate over whether yoga is a religion or not – where is the line between the body and the soul?
♦ SAYA, a Jerusalem-based design studio, is trying to provide a architectural resolutions to territorial disputes: “you can’t stop terror with just a fence. We need to imagine structures that can build hope instead of fear and resentment.”
♦ When Alex Christodoulou tried to quit his job for life in the Greek public sector, he found the process harder (and more labyrinthine) than he ever thought it could be, especially when the government had committed to taking thousands of workers off the public payroll. “They wanted to rehire him so that they could fire him and include him in the number of public servants being laid off to appease Greece’s international creditors”.
♦ In a review of The Impossible State: North Korea, Past and Future, Richard Lloyd Parry argues against the idea that North Korea is a “zombie nation”, but wonders if the idea that the country is in a state of “political undeath” doesn’t perhaps suit some other states.
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French President Francois Hollande after a press conference with Greece's Prime Minister Antonis Samaras on February 19 (AP Photo/Thanassis Stavrakis, Pool)

(AP Photo/Thanassis Stavrakis, Pool)

Listening to François Hollande’s comments on his flying visit to Greece earlier this week was like hearing a reprise of his electoral campaign, in which he promised to lead a European-wide fight against austerity.

In Athens, Hollande praised the Greek government and said that, for Greece – “The next phase is one of growth and creating jobs, not more sacrifices.” Sadly, although there are signs that private-sector investment in Greece is picking up, there is also certainly more austerity and more job cuts to come, in the public sector.

President Hollande was only in Athens briefly, and so is hardly likely to be held to account for his remarks in Greece. What is more problematic is that the latest figures suggest that he will be unable to hold off the drive for more austerity back home in France. Economic growth is down and the French economy may even shrink in 2013 – compared to the Hollande administration’s initial projection of growth of 0.8%. Partly as a result, France is going to miss its target of getting the country’s deficit below the EU-mandated 3%. Read more


Welcome to our live coverage of the eurozone crisis. We’ll bring you all the developments. By Tom Burgis and Ben Fenton in London with contributions from FT correspondents across the world. All times are GMT.

 

 

17.37: As the EU’s political leaders get down to talks, we are closing down the live blog for today, but it will be up again bright and early tomorrow to pick up on whatever is decided overnight. Meanwhile, elsewhere on FT.com you’ll be able to find coverage of the summit kept fresh by our sleep-deprived Brussels team.

17.29 More bleak news for the UK’s Triple A credit rating, via FT markets editor Chris Adams:

[blackbirdpie url="https://twitter.com/chrisadamsmkts/status/279275102162522112"]

17.24 More twists and turns in this tale of what said what to whom about the Italian elections at the centre-right EPP’s pre-summit meeting today (see 15.49 and 17.06).

Antonio Tajani, the Italian EU commissioner and a Berlusconi ally, is quoted by Italian news agency Adnkronos as saying that none of the leaders of the EPP “expressly asked Monti to be a candidate”.

“Everyone spoke well of Monti but no one wants to interfere.”

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With friends like these…. Jean-Claude Juncker and Christine Lagarde. (AFP)

It’s not as if the troika of eurozone rescue lenders never falls out, but usually it takes a not-in-front-of-the-children attitude to airing its rows. A refreshing change on Monday night, as my colleagues Peter Spiegel and Josh Chaffin report, when the eurogroup summit, while not actually deciding anything substantive, made sure it would stand out from the dozens of other such gatherings by hosting a very public argument between the eurogroup’s Jean-Claude “We all know what to do, we just don’t know how to get re-elected after we’ve done it” Juncker and the IMF’s Christine Lagarde.

The actual substance of the spat looks laughably trivial. It’s about whether Greece hits its 120 per cent of GDP debt target in 2020 or in 2022, which, given the huge uncertainties in forecasting debt dynamics, is about as precise as a Florida election count. The 120 per cent target is itself pretty arbitrary, apparently based on what seems to be sustainable in Italy, which is a very different country with a more flexible economy and captive domestic investor base for government bonds. Read more