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MAIN FOCUS | 03/07/2015

IMF: Athens needs a third bailout

The IMF estimates in its latest analysis that Athens will need around 52 billion euros in new loans until 2018, as well as debt relief. Instead of talking about bailouts the Euro Group should finally talk about a debt write-down and Eurobonds, also commentators warn, pointing to how Argentina once solved its debt crisis.

With articles from the following publications:
De Morgen - Belgium, The Economist - United Kingdom, El Huffington Post - Spain, The New York Times - U.S., Wiener Zeitung - Austria, Proto Thema - Greece

De Morgen - Belgium

The debt relief taboo must finally be broken, the centre-left daily De Morgen demands: "This is not the first time the IMF has argued in favour of debt relief as the key component of a solution. But it is highly remarkable that the international creditor has come now of all times with a recommendation that deviates gingerly from [IMF chief] Lagarde's unbending stance and presents something that until now had been a major political taboo as an absolute necessity. Up to now the IMF's calls for debt relief have always met with opposition from the European governments. In its latest analysis the IMF ignores this. The situation is now so bad, the economists say, that the one-sided method of 'sink or swim' won't work any more, even if the political leaders continue to support it." (03/07/2015)

The Economist - United Kingdom

The euro will only remain viable after the Greek crisis if member states share the burdens of risk and responsibility, the liberal business weekly The Economist warns: "To protect against downturns, euro-zone members must create automatic mechanisms, such as collective unemployment insurance, that channel extra funds to countries in recession. Instead of bail-outs, the single-currency area needs more joint pooling of risk and responsibility - some form of 'Eurobonds' or jointly guaranteed sovereign debt - governed by fiscal rules more binding than today's. ... The moral of Greece's disaster is that Europeans must face up to the euro's contradictions now - or suffer the consequences in more ruinous circumstances." (02/07/2015)

El Huffington Post - Spain

Greece is in a similarly difficult situation to the one Argentina faced in 2001, economists Joseph Stiglitz and Martin Guzman point out in the centre-left web paper El Huffington Post: "In both countries, recessions turned into depressions as a consequence of austerity policies - making the debt even more unsustainable. In both cases, the policies were demanded as a condition for assistance. Both countries had rigid currency arrangements that gave them no possibility for running expansionary monetary policies during the recession. In both countries, the IMF got it wrong, providing alarmingly flawed forecasts of the consequences of the imposed policies. Unemployment and poverty soared, and GDP plummeted. ... Defaults are difficult. But even more so is austerity. The good news for Greece is that, as Argentina showed, there may be life after debt and default." (03/07/2015)

The New York Times - U.S.

The Greek government's negotiating style has alienated all the Eurozone countries, the liberal daily The New York Times observes: "Alexis Tsipras, the Greek prime minister, has spent the last six months, since his left-wing Syriza party came to power, trying to shift the entire political framework of his country's bailout negotiations. That effort has failed. ... The Greek government was surely hoping that by walking away and calling a referendum, the creditors would rethink their intransigence, fearful of the economic and geopolitical consequences of letting Greece leave the eurozone. If anything, it pushed Germany and France, as well as Spain and Italy, closer together, full of exasperation with the Greeks' negotiating style and aggressive demands." (02/07/2015)

Wiener Zeitung - Austria

Prime Minister Alexis Tsipras and Finance Minister Yanis Varoufakis are betraying the ideals of the left, journalist Werner Stanzl criticises in the liberal daily Wiener Zeitung: "The editors of almost all German-language newspapers, radios and television stations have rushed to present the empty verbiage of Greek Prime Minister Alexis Tsipras and his Finance Minister Yanis Varoufakis as leftist thought - or even as its elixir. Nothing does more to disqualify this view than the in part intentional, in part naive lack of criticism with which the half-truths and falsehoods from Athens have been cast as part of a pan-European socialist programme. .. Leftist politicians would never have taken risks with such catastrophic repercussions for the entire populace. Syriza's gamble is a display of contempt for human lives, and has completely besmirched the ideas of the left." (03/07/2015)

Proto Thema - Greece

The European Commission and European politicians have warned the Greeks in recent days not to vote against austerity in Sunday's referendum. This provokes harsh criticism from the liberal anti-government weekly Proto Thema: "What we are now seeing is a post-modern putsch coordinated by Berlin and aimed at toppling the left-leaning government. [German Chancellor] Merkel said yesterday that the current differences of opinion were of a political nature and not about money, 400 million euros, or any other sum. It was for this reason that [german finance minister] Schäuble rejected the Greek government's last proposal for compromise. It's clear that what Berlin wants is not an agreement but the fall of the government and the unconditional surrender of the country. If this government can be accused of one thing it's that it has allowed itself to be dragged into a war that it wanted to avoid." (03/07/2015)

MAIN FOCUS | 02/07/2015

Euro Group sends Athens packing

The finance ministers of the Eurozone have ruled out further bailout negotiations with Greece before the referendum. This decision came after Athens had accepted almost all the austerity demands in a letter to the creditors. Some commentators urge the Greeks to say no to the austerity policy on Sunday for Europe's sake. Others see the vote as a diversionary manoeuvre by the government in Athens.

With articles from the following publications:
Le Quotidien - Luxembourg, 24 Chasa - Bulgaria, Sme - Slovakia, Le Figaro - France, Corriere della Sera - Italy

Le Quotidien - Luxembourg

Brussels could be forced to make a necessary change of course if the Greeks reject the creditors' offer in Sunday's referendum, the centre-left daily Le Quotidien comments: "The European left hopes that the Greeks will vote no. That would be a clear sign that the austerity, rigour and blindness that for years have determined the fate of the people of Europe are no longer called for. How can one trust a troika that for years has been sinking the Greek ship? ... If the Greeks say no on Sunday they won't be saying no to Europe: they'll be rejecting the vision of the world that led them into the abyss. Without wanting to absolve them of their responsibility, this no won't fail to open Brussels' closed doors. And it will force Europe to listen to new ideas that are no doubt needed because today's model is no longer tenable." (01/07/2015)

24 Chasa - Bulgaria

The Tsipras government is trying to evade responsibility with the referendum, the daily 24 Chasa complains: "All the chances have been wasted. Tsipras and his finance minister have no more advocates in the EU. After all the billions that have been pumped into the Greek budget and all the offers made to the Greeks, the EU finance ministers don't want to play any more games. The Greek crisis is now solely Greece's problem. … Alexis Tsipras and his cabinet are trying to pin the blame for their failure on the evil Europeans, the neo-liberals, the conspiring creditors, Germany, the IMF and capitalism. This is why they are bidding the Greeks to the ballot on Sunday. Soon we'll see whether they prefer to queue up at the polling stations or at the cash points." (01/07/2015)

Sme - Slovakia

Even if the Greeks, with Prime Minister Alexis Tsipras at the fore, have driven practically every European crazy in the last few months it would be wrong to abandon them now, warns the liberal daily Sme: "It would be unfair to claim that the Greeks have done nothing in the last five years. Back then their living standards were like those in France while their productivity was even lower than Slovakia's. This is no longer the case today. … The astronomic sums this has cost Europe are only huge at first glance. Just take a look at Eastern Germany, at the sums that the German government pays there. Roughly calculated, it would have ten times more debt than Greece today without that help. … The Greeks, too, deserve a second chance. The country is of vast strategic importance for Europe and the entire West. Its economic suicide would be a defeat for all Europe." (02/07/2015)

Le Figaro - France

In refusing further negotiations before Sunday's referendum the Euro Group has aligned itself with Germany, while France's President François Hollande has argued in favour of a quick compromise. The rift between Berlin and Paris is growing, the conservative daily Le Figaro comments: "The president doesn't want to further alienate the left-wing of his party, which is already very restless. Despite his assurances that the economy is improving, he has shown that he is afraid of an economic shock. And the amount of debt or observance of Europe's rules were never among his priorities. The chancellor, for her part, has been pushed to demonstrate severity by her Social-Democratic coalition partners - who are clearly far removed from their French counterparts. She need have no fear for her economy, and for her Greece is less important than the principles without which the euro would be 'doomed'. The Greek conflict has brought to light a serious Franco-German malfunction." (02/07/2015)

Corriere della Sera - Italy

Washington urged the EU on Monday to continue talks with Athens. Once again the widening gap between Europe and the US is evident, the liberal-conservative daily Corriere della Sera writes: "If the US president favours an agreement with Athens, he is guided by geopolitics. Left to its own resources, excluded from the single currency and perhaps from the EU, Greece would fall into the hands of Russian President Vladimir Putin. German Chancellor Angela Merkel sees the same danger, but she doesn't perceive it as such a threat. And Greece is not the only point on which the views diverge. After the jihadists' most recent attacks, criticism in Europe of the US's absence has grown loud. And in the Ukraine crisis too, the apparent harmony conceals major rifts within Nato and the EU. … The transatlantic alliance is not in crisis. But it needs to be revised according to the criteria of the new world order." (02/07/2015)

MAIN FOCUS | 01/07/2015

Athens defaults on IMF payment

Greece has failed to make a 1.55 billion euro payment to the IMF that was due at the end of June. Prior to this the Eurozone finance ministers rejected an appeal to extend the country's bailout programme by a few days. The Eurozone has committed an inexcusable mistake by driving the country into insolvency, some commentators write. Others call for an end to indulgence for the debt-ridden country.

With articles from the following publications:
De Standaard - Belgium, La Repubblica - Italy, Blog Pitsirikos - Greece, The Irish Times - Ireland, Die Welt - Germany

De Standaard - Belgium

It was an enormous mistake of the Eurozone to manoeuvre Greece into a situation in which it had to default on an IMF payment, the liberal daily De Standaard laments: "It is a shameful defeat for all involved leaders that a member of the Eurozone has been forced to default on its financial obligations. The euro is not merely a market instrument that obeys the laws of supply and demand. It is the concrete expression of the will of hundred of millions of Europeans to share a common destiny. The way in which this will has been played with in recent months has damaged the credibility of the entire European project. … It is an irreparable disgrace. Regardless of the referendum on Sunday and how the Greeks vote, Europe will have to live with this incredible mistake from now on." (01/07/2015)

La Repubblica - Italy

The rejection of further austerity demands is the only sensible way out of the Greek crisis, economist Mariana Mazzucato writes in the centre-left daily La Repubblica: "As Greece's finance minister Varoufakis has repeatedly stressed, Greece isn't suffering a liquidity crisis but a solvency crisis that in turn has been caused by a competitiveness crisis and been exacerbated by the financial crisis. A crisis of this type can't be solved with more and more cutbacks, but only with a serious investment strategy accompanied by real and not pro forma reforms to boost competitiveness. In the false belief that this is merely a liquidity crisis, too much focus was put on the debt repayment deadlines and stringent austerity requirements for new bailout packages which without growth and competitiveness can never be repaid, thus creating a vicious circle." (01/07/2015)

Blog Pitsirikos - Greece

Greece's opposition leader and former prime minister Antonis Samaras has described Sunday's referendum as a vote on whether or not to remain in the EU - and not on the creditors' austerity demands. But only by voting no can the Greeks stay in the European Union, blogger Pitsirikos writes: "If all the Greeks were to vote no, Greece's position in the European Union would be secure. Saying yes to the requirements would sooner or later lead to Greece exiting the EU. Only a no would be taken seriously by the EU leaders. In addition, other European countries that are keeping a close eye on the situation will follow our lead. A yes would mean prolonging the policy of sky-rocketing state debt, impoverishment, emigration and all the other ills that austerity has brought with it. A yes would mean subordination. And that would be the end." (30/06/2015)

The Irish Times - Ireland

In the austerity policy debate Ireland is often described as a success story among the EU crisis states. But that's not quite the reality of the situation, the centre-left daily The Irish Times argues: "'The Pride of Europe' is a makey-up story that is intended to take the place of the realities it displaces. It's not a stand-alone narrative. It has an evil twin: Greece. It belongs to a particular genre of fiction: the morality tale. Ireland is the pride of Europe because it is the anti-Greece. We are good because we play along with the bigger stories of the euro zone crisis. Greece is evil because it stopped doing so. … We exist, not as a society, but as a necessary validation for a destructive fiction." (30/06/2015)

Die Welt - Germany

Europe should part ways with its problem children and follow a self-assured path to economic excellence, the conservative daily Die Welt urges: "Instead of gingerly and guiltily defending economic success, the EU should proclaim even louder that the (for the most part) luxurious living standards in Europe must be fought for on a day-to-day basis in the global competition. For years Europe has hindered its own progress by caring - and paying - for its problem children, instead of developing itself as a high-wage region and cultural landscape where excellence is the order of the day. ... Europe is a cultural and economic success story. The majority of Europeans put ambition above redistribution. Hence European consolidation is only possible in the form of an association of sovereign - and in particular economically sovereign - states. Merkel must now do something she's not particularly good at: stop moderating and take a risk. She must put herself at the forefront of progress. With like-minded people for a Europe of excellence." (30/06/2015)

MAIN FOCUS | 30/06/2015

Tsipras threatens with resignation

Prime Minister Alexis Tsipras has hinted that he will resign if the Greeks vote in favour of the creditors' austerity demands. EU Commission President Jean-Claude Juncker and German Chancellor Angela Merkel have meanwhile spoken out against the lenders making a new offer. Both sides must return to the negotiating table to prevent a Grexit, some commentators urge. Others believe the euro should be scrapped entirely.

With articles from the following publications:
Efimerida ton Syntakton - Greece, Keskisuomalainen - Finland, Ziarul Financiar - Romania, The Wall Street Journal - U.S., Lidové noviny - Czech Republic, Neue Zürcher Zeitung - Switzerland

Efimerida ton Syntakton - Greece

A Grexit will have repercussions for all Europe, warns the centre-left daily Efimerida ton Syntakton, appealing to Athens and the EU to stop their power games: "Fear and division are the two major dangers at this moment. … Perhaps this is a unique opportunity in the long history of the Greeks for them to fight out the campaign against the austerity policy and the powers that be - a fight with which most European nations identify. The dip in share prices when the markets opened on Monday has shown that a Grexit is not just Greece's problem but everyone's. It won't be easy, either for us or for our EU partners. Everyone should now stop playing the power games and assume responsibility: We don't deserve to see the country crash. And we must stick together." (29/06/2015)

Keskisuomalainen - Finland

Leaving the monetary union could help Greece in the long term even if the Greeks suffer inititally, the liberal daily Keskisuomalainen writes: "If the financing [by the creditors] ends after a no vote in the referendum on Sunday, Athens will be left to its own devices. … Greece will probably leave the Eurozone one way or another. If it has its own currency it can devalue it and thus slowly regain competitiveness. In practice, having one's own currency results in a rapid and efficient impoverishment of the citizens, because the wages currently paid to the Greeks in euros are too high in proportion to the country's output, and the taxes are too low." (30/06/2015)

Ziarul Financiar - Romania

20 years ago many in Romania saw Greece as a model for development. But if Greece exits the Eurozone it would come as a bitter lesson for Romania, the business paper Ziarul Financiar comments: "If Greece leaves the Eurozone it would call into question the development model for poor countries based on European funding. ... Excluding Greece from the Eurozone would prove that it is not possible for a country to develop mainly on the basis of loans from other states or private lenders. If this catastrophe does happen we'll have to forget about Romania ever joining the Eurozone. The day after the drachma replaces the euro in Greek wallets, Romania will have to take a deep breath and come to terms with the fact that it can only count on itself." (30/06/2015)

The Wall Street Journal - U.S.

The creditors must not give in to Athens now, the liberal daily Wall Street Journal urges, reminding the Tsipras government of the consequences of leaving the Eurozone: "Optimists claim a return to a cheaper drachma would be good for tourism, but that would come with a huge decline in living standards. Greeks who owe debt in euros but suddenly earned income in drachmas would be crushed. Another deep recession would be inevitable. ... Appeasing Syriza's demands could spread political contagion to Spain, Portugal and other countries that might think they too can avoid reform and still be rescued. A last-minute reprieve is possible, but if not the Greeks will have committed suicide by ignoring economic reality." (29/06/2015)

Lidové noviny - Czech Republic

Although the government in Athens is completely unpredictable its behaviour will not pose a threat to the euro and the EU, the conservative daily Lidové noviny comments: "What goes on in the heads of a radical left-wing government is hard to predict. Perhaps the new drachmas have already been printed. Perhaps Tsipras will stand in front of his people today or tomorrow and hail a new era of progress and social security. Perhaps not. … And what comes next? Will the euro or even the EU go to pieces? Will the Greek example prove contagious? ... No, there won't be any contagion. The Italians, Spaniards, Portuguese and other risk candidates have been sufficiently deterred by the Greek example and won't follow suit. Greece's collapse ultimately won't have any continental significance. Not even if the country introduces a new currency." (30/06/2015)

Neue Zürcher Zeitung - Switzerland

Europe must scrap the monetary union entirely, write the Basel-based economists Lukas Hohl and Rolf Weder in the liberal-conservative Neue Zürcher Zeitung, describing this as the only logical consequence of the looming Grexit: "The US economist Paul Krugman sounds cynical when he writes that the 'real risk for the euro' is that Greece recovers one or two years after exiting the union, setting a positive example that others would follow. We see it as problematic to conclude from this that Greece should be kept in the single currency at any cost. If we believe that the monetary union limits the development potential of countries like Greece, then we must support the Grexit and the long-term dissolution or re-dimensioning of the EMU. … If the euro is not good for the EU or Europe we must start thinking about how to get rid of it." (30/06/2015)

MAIN FOCUS | 29/06/2015

Debt dispute escalates

After the announcement by Greek Prime Minister Alexis Tsipras that he will put the creditors' reform requirements to a referendum, the Euro Group wants to end the bailout programme on Tuesday. Tsipras had no choice but to hold a referendum, some commentators believe. Others criticise that the vote will be democratic only on the surface.

With articles from the following publications:
La Repubblica - Italy, Naftemporiki - Greece, Financial Times - United Kingdom, Kurier - Austria, Die Welt - Germany

La Repubblica - Italy

Greece's creditors have left Alexis Tsipras with no other option but to let the people decide, US economist Paul Krugman writes in the centre-left daily La Repubblica: "Until now Syriza has been in an awkward place politically, with voters both furious at ever-greater demands for austerity and unwilling to leave the euro. It has always been hard to see how these desires could be reconciled; it's even harder now. The referendum will, in effect, ask voters to choose their priority, and give Tsipras a mandate to do what he must if the troika pushes it all the way. If you ask me, it has been an act of monstrous folly on the part of the creditor governments and institutions to push it to this point. But they have, and I can't at all blame Tsipras for turning to the voters, instead of turning on them." (29/06/2015)

Naftemporiki - Greece

Alexis Tsipras has described the decision of the parliament in Athens to hold a referendum next Sunday on the troika's austerity demands as an important step for his country's democracy. The conservative business paper Naftemporiki has its doubts: "The prime minister has chosen the path of a referendum as the supreme democratic process that is to bring a solution for the country in this critical moment. But will it really fulfil this purpose? … The vote on an agreement that has not yet been concluded and which entails dozens of tax measures and other complicated issues, the details of which we don't know and can't understand can't be formulated in one clear question. … To enable the citizens to assume responsibility, the government - and above all the rest of the political world - should explain responsibly and honestly what the consequences of a Yes or No vote will be." (29/06/2015)

Financial Times - United Kingdom

The finance ministers of the Eurozone have played right into the hands of Greek Prime Minister Alexis Tsipras by insisting that the bailout programme expire this Tuesday, columnist Wolfgang Münchau writes in the liberal Financial Times newspaper: "By far the biggest tactical error committed over the weekend, however, was the rejection by eurozone finance ministers of a five-day extension of the Greek bailout programme to beyond the referendum. With that decision, they foreclosed the only way to keep the show on the road. They have unwittingly strengthened the political argument of the Greek prime minister. He will now be able to say: first the creditors wanted to destroy the Greek economy with their austerity programme. And now they are hoping to destroy Greek democracy." (28/06/2015)

Kurier - Austria

Greece's looming state bankruptcy is an admission of failure on the part of Europe, the liberal daily Kurier writes: "The country's economic output has sunk by one third. Those who still have work earn around 50 percent less. Three million Greeks have no social insurance. A quarter of the population and over half of its youth are unemployed, many since the start of the crisis. ... The social misery has long since peaked. Now the Greeks are facing total bankruptcy. No one believes this will solve a thing. Rather it is much more likely that the Greeks' plight will only worsen. And all that because we insist on squeezing the last penny out of a country that's already lying motionless, even though it makes no sense from either a humanitarian or an economic point of view . When the EU politicians really want to, they can find solutions. They've proven that often enough since 2009. Ultimately our message - bailing out banks with hundreds of billions? yes; rescuing states? no - endangers the EU project and the euro far more than corrupt Greeks ever could." (29/06/2015)

Die Welt - Germany

After the announcement of a referendum in Greece, the conservative daily Die Welt sees a Grexit as likely and helpful: "For the first time since the start of the debt crisis there is a real and - judging by the financial markets - manageable possibility of a Grexit. This step could prove liberating for both sides for many reasons. … With their own currency [the Greeks] have better long-term economic prospects and will regain at least some of the sovereignty they so sorely miss. In other euro states there may be opposition to the consolidation policy, but the view prevails that only a competitive Europe has a future. It is not Merkel's euro course that has failed, but the repeated attempts to make the indispensable prerequisites for membership of the monetary union attractive to Greece." (29/06/2015)


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