© The Financial Times Ltd 2015 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
Sometimes it’s easy to forget that the Greek crisis is not just financial in nature. It has geopolitical implications that extend beyond whether or not Greece remains in the eurozone.
There is, for example, the potential impact on one of Europe’s longest-running territorial disputes: Cyprus. Whatever events unfold in Greece after next Sunday’s election, the Greek Cypriot-controlled state of Cyprus will continue to be vulnerable because of its financial system’s massive exposure to Greece and because of its decision last year to turn to Russia for a €2.5bn loan. Read more
Well, when I say ‘We’, I mean the Financial Times, and to be more specific, a group of Europe specialists who work at the Financial Times. Yes. The FT has published its very first ebook [drum roll here], which means that even when you are lying on a beach in the middle of nowhere with nothing but a Kindle, Nook, iPad or other branded e-reader in your sandy hands, you can still tickle your braincells with FT content and feel yourself grow more knowledgeable about a multitude of things. Read more
Costas Mitropoulos, chief executive of the Hellenic Republic Asset Development Fund, otherwise known as Greece’s privatisation agency, is the most eloquent advocate of selling off state property I have ever met. Once he actually starts doing it, he will be an unchallenged master of his craft. Read more
By Tony Barber, Europe Editor
Greece, teetering on the precipice of the eurozone, is to hold a parliamentary election on June 17. This will be its second such vote in 43 days. A depressing insight into the country’s political paralysis was provided by transcripts of discussions that President Karolos Papoulias, Greece’s head of state, held with party political leaders on May 13 in an attempt to resolve the impasse.
These transcripts (made public by the president’s office) would make you roar with laughter – if you weren’t weeping in despair at the petty-mindedness, stupidity and shamelessness of some of Greece’s politicians. Read more
Dr Jan Fidrmuc, Department of Economics and Finance and Centre for Economic Development and Institutions, Brunel University
Following the rejection of EU imposed austerity measures by the overwhelming majority of Greek voters, eurozone finance ministers have once again come to Brussels to try and save the single currency in what is being described as a ‘crucial 48 hours’.
Two thirds of the Greek electorate voted for parties opposed to the austerity measures required by the European Commission, ECB and IMF as a precondition of a further bailout; despite the outgoing government pledging to adhere to these measures.
Without compromise either by the Greeks accepting austerity measures or the EU offering concessions on the proposed package, another election is inevitable. In this case the bailout package will be suspended, Greece will default on its debt and an exit from the eurozone may follow. None of this will offer much respite for the struggling Greek economy.
In the past the EU offered concessions to voters having rejected EU treaties, however this time there is little political will, and not only in Germany, to offer sweeteners to the Greeks to help them swallow the bitter pill of fiscal adjustment.
Why then are the Greeks fighting against the support from the EU? And should the rest of the EU let them resist or should they be offered a sweeter deal after all?
Today we’re looking at Greece. Yup, again. But over the last week, the possibility that the Mediterranean country of 11 million people might actually leave the eurozone – a scenario long considered taboo – has become increasingly plausible. European policymakers and central bankers have gone from repeated assurances that a ‘Grexit’ would never, EVER happen, to a gradual admission that, yes, it’s possible. And if that’s the case, then the threat of contagion to the larger eurozone economies of Spain and Italy – and thus the broader single currency project – is magnified. Much will rest on the outcome of fresh elections in Greece on June 17. In the meantime: Read more
The eurozone crisis is back with a vengeance. In a Bloomberg poll published on Thursday, 57% of 1,253 Bloomberg subscribers said they believed at least one country would abandon the euro by year-end. No prizes for guessing which country they might be thinking of.
Greece’s political landscape shifted drastically after support for its two biggest parties collapsed in the general election, propelling the far left Syriza party into the spotlight. Spain, meanwhile, is set to miss its budget deficit target for this year and the next. The government also had to part-nationalise the troubled Bankia.
We rounded up the best reads on Spain for you last week. Now we take a look at one of the other countries currently at the centre of the crisis – Greece – and give you the top analysis and comment from the FT and elsewhere. Read more
Not only is the Greek programme itself on a knife-edge – super-sensitive to yet more growth shortfalls, doubts over political commitment to implementation, the usual – but the Fund is close to the limits of its own flexibility on how much it can lend to a single country, under its snappily-named “exceptional access” criteria. Read more
Welcome back to our continuing coverage of the eurozone crisis. By Esther Bintliff on the world news desk in London, with contributions from FT correspondents around the world. All times GMT.
18.45 That’s all from the live blog for tonight, but you can keep up to date with all the latest news and analysis on FT.com. We’ll leave you with a summary of events today:
- Investors holding 85.8 per cent of Greece’s private debt agreed to participate in the country’s €206bn debt restructuring
- The Greek cabinet approved the use of collective action clauses (CACs), to force recalcitrant investors who own bonds under Greek law to take part in the swap
- Once the CACs are activated, participation will rise to 95.7 per cent, the level that Greece’s troika of lenders say is necessary if the country is to cut its debt to 120 per cent of GDP by 2020
- Eurozone finance ministers held a conference call, in which they agreed to release up to €35.5bn ($47bn) in bailout funds to help fund the debt swap
- Spanish trade unions voted for industrial action at the end of March
- And finally, the International Swaps and Derivatives Association began their meeting at 13.00 to discuss whether the debt swap constitutes a credit event, which would trigger credit default swaps. At the time of writing, we still didn’t know the answer.
All times are GMT. This post should update automatically every few minutes, but it may take longer on mobile devices.
19.15: That’s it for the liveblog for today. Follow FT.com through the evening for analysis of the day’s developments and more news of the deal as we get it. A few top stories from today to keep you going in the meantime:
- Greece says nearly 80% support debt swap
- Mario Draghi takes on his critics
- Spain’s rising public debt
- Global market overview: shares lifted by Greece hopes
- FT Short View video: Greece priced for next default
From the FT’s Brussels Blog:
Over the last 24 hours, a flurry of activity has taken place surrounding Greece’s €200bn debt restructuring, most of it expected but some of it potentially destabilising. Because the moves involve highly technical – but still significant – judgements by occasionally obscure groups, Brussels Blog thought it was time for another guide to what to watch for in the ensuing days.
The most eye-catching announcement was the one made last night by Standard & Poor’s declaring Greece to be in “selective default”. Luxembourg prime minister Jean-Claude Juncker, chair of the group of eurozone finance ministers, put out a statement saying the move was “duly anticipated” – and he’s right. S&P signalled this way back in June when the first talk of a Greek restructuring began.
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:
- Negotiators for private bondholders have backed the latest Greek deal forcing them to accept a haircut, but avoiding a disorderly default next month.
- While the euro rallied, European equities closed down as the deal left investors unimpressed while US stocks neared a post-financial crisis high, driven by psychological thresholds .
- Evangelos Venizelos, Greek finance minister, told an Athens press conference that the official offer on the bond swap would be made to bond holders by the end of this week. A government official added that the collective action clause, forcing holdout investors to participate, would be approved by parliament on Thursday.
- Reaction on the streets of Athens was muted, with leftwing parties saying the deal was bound to make the recession worse. Aleka Paparriga, Greek Communist party leader, said “it’s not impossible that this crisis will turn into a disorderly default within months”.
- Lucas Papademos, prime minister, convened a cabinet meeting to put the finishing touches to a pile of legislation that must pass in parliament by the end of February – if Greece’s credibility is to be maintained at the March 2 summit of European leaders, the next stage towards getting funding from the bailout agreed overnight.
- Greek government officials confirmed that the country will hold a general election at the end of April or the beginning of May.
Welcome back to our continuing coverage of the eurozone crisis.
By Esther Bintliff and John Aglionby in London and Anjli Raval in New York, with contributions from correspondents around the world. All times GMT.
It was decision day on the Greek bail-out. After so many twists to this saga here is a round-up of what came out of the meeting of eurozone finance ministers after more than 13 hours of talks, courtesy of Peter Spiegel and Alex Barker of the FT’s Brussels bureau.
- A long-delayed €130bn second bail-out for Greece was agreed on.
- Further “haircuts” were pushed for after a confidential debt analysis showed that the previously-negotiated deal would cost €136bn and would only lower Greek debt to 129 per cent, rather than 120 per cent, of economic output by 2020.
- Although Greek bondholders agreed in October to accept a 50 per cent cut in the face value of their bonds, they will now be offered a “voluntary” deal with a haircut of 53.5 per cent.
- That will get Greek debt levels to 120.5 per cent by 2020, close to the IMF’s goal for long-term debt sustainability.
- The euro rose 0.8 per cent to 1.3257 on the news, before falling back to 1.3263 at 4.20 GMT.
Want to know a little of how it feels to live in Greece today? This photo, taken in Athens on February 13, could be a good place to start. The headquarters of the Bank of Greece defaced, the logo replaced with ‘Bank of Berlin’; a blood-like splatter of red paint; a scrawl of caustic advice to Greek citizens confronting pay cuts and tax rises: “Rob to Get Money”. And in the corner, a woman, who is presumably trying to get on with the everyday reality of her life.
As the country flounders under unsustainable debts and the increasingly shrill demands of international creditors, the Greek people are facing their fifth consecutive year of recession- and that is before the latest round of austerity measures have even been enacted.
How much more can they take?And how long before the rest of Europe concedes defeat in its battle to prevent the country from a messy default? Read more
Welcome to our continuing coverage of the eurozone crisis.
All times GMT. By Tom Burgis and Esther Bintliff in London, and Anjli Raval in New York, with contributions from FT correspondents around the world.
23.13 European finance chiefs deferred ratifying a rescue package for Greece, pressing the government in Athens to put a newly struck austerity plan into action. Here are some closing remarks after talks this evening where no final decision on the deal was made:
- Greece is in “the middle of the road,” and much work remains on its recovery, the country’s prime minister Lucas Papademos said in a statement.
- Greece must pass its latest austerity package into law and identify €325m in spending cuts before euro-area governments endorse a second bailout for the country, Luxembourg prime minister Jean-Claude Juncker said after chairing the emergency meeting of euro-area finance ministers. “Despite the important progress achieved over the last days we didn’t yet have all necessary elements on the table to take decisions today,” he said.
Christine Lagarde, IMF managing director said: ”There is clearly some very encouraging news coming out of Athens and … after the very heavy duty work that has been done lately, I think it’s positive.”
Welcome to our first eurozone live blog of 2012. By John Aglionby, Tom Burgis and Esther Bintliff on the news desk in London with contributions from correspondents around the world. All times are GMT.
Welcome to our continuing coverage of the eurozone crisis. All times are GMT. By Tom Burgis, James Crabtree and John Aglionby on the news desk in London, with contributions from FT correspondents around the world.
The turmoil in the eurozone has taken a troubling turn in recent days, with anxiety spreading from Europe’s periphery to its “core” countries. Even as Italy’s Mario Monti readies his economic agenda to be presented today, investors are looking at France, the Netherlands and Austria with increasing unease and wondering whether the ECB might yet ride to the rescue. Over in Greece, today is the anniversary of 1973′s mass student protests – with demonstrators once more planning to take to the streets. And the bond markets are showing ever more strain, with today’s Spanish bond auction souring sentiment still further. Read more
Welcome back to the FT’s rolling coverage of the eurozone crisis. By Esther Bintliff and John Aglionby on the world news desk, with contributions from correspondents around the world. All times GMT.
Europe’s two new technocratic prime ministers consolidated their respective grips on power today. Lucas Papademos in Greece won a confidence vote in parliament, while Mario Monti, his Italian counterpart, announced his new cabinet and was sworn in as prime minister.
19.03: We’re going to wrap up the live blog for tonight, but you can read lots more on FT.com. Here’s a quick update on today’s events:
- In Greece, prime minister Lucas Papademos won an overwhelming vote of confidence in his new interim government – 255 votes in favour, 38 against
- Charles Dallara, managing director of the Institute for International Finance, is about to meet with Mr Papademos (see our 12.15 update). The IIF has been negotiating with Greece on behalf of investors holding Greek sovereign debt
- In Italy, Mario Monti unveiled his new technocrat cabinet (see our 12.52 update, and this article) and said he would serve as both prime minister and finance minister. ”We finally have a competent government, not one of dwarves and ballerinas,” declared Antonio di Pietro, former anti-graft magistrate and head of the Italy of Values party.
- Italy’s statistics agency spooked the market by announcing that it wouldn’t be releasing preliminary Q3 GDP data
- The number of jobless in the UK reached 2.62m, a 15-year high, while the number of young unemployed topped one million for the first time since these records began in 1992
- In its November Inflation report the Bank of England revised downwards its growth and inflation forecasts, and prompted economists to predict that quantitative easing would be ramped up sooner than expected
- Mervyn King, the Bank of England governor, said he had “great sympathy” with the ECB in “not going around and buying all sorts of assets”
- Angela Merkel said Germany was prepared to “give up a little bit of national sovereignty” in the name of strengthening the wider eurozone area (see 13.44 update)
- Portugal passed its latest troika exam - or rather, the European Union and International Monetary Fund approved the disbursal of the next €8bn tranche of the country’s €78bn financial rescue package after concluding a second quarterly review of the the government’s progress with the bail-out programme (16.04 update)
- Italy’s 10-year government bond yield spent the day fluctuating around 7 per cent – and finally settling at that level, reports Dave Shellock on our markets team. Reported buying by the European Central Bank of both Italian and Spanish debt offered only limited support