Athens seeks new loan extension

Athens will go ahead and request a loan extension in the debt conflict between Greece and the EU, a Greek government spokesperson said today, Wednesday. First the government must explain how it plans to service the loans, some commentators say. For others the onus is on Berlin to liberate Europe from enforced austerity.

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El País (ES) /

Athens must explain the details

The Greek government must present a detailed account of its guarantees and terms for new loans, the left-liberal daily El País demands: "The credibility of the reforms depends on the details. At the same time they are the prerequisite for the agreement. How can they know what a new tax reform should look like if they don't know how high the revenues will be? What do the ten reforms to be backed by the OECD consist of? Without concrete proposals many governments won't be able to meet the Greeks half way. Even if they want to make a deal they are under pressure from their citizens. Without a deal, however, the capital flight will continue, the tax revenues will dwindle further and the GDP will continue to shrink as it has been doing since the rupture effected by the new government began." (GB) /

German austerity a danger for entire Eurozone

If the government in Berlin clings to its austerity policy it will destroy not only Greece but the entire Eurozone, economist George Irvin writes on the left-wing blog portal Social Europe: "What matters is the question of joint responsibility - 'mutuality' is the preferred term. ... To complement Eurobonds, an EZ-wide fiscal policy is needed too - one that both taxes and (as in the USA) distributes benefits. For ordinary people, the EZ offers less and less - it now seems to offer only endless German-led austerity based on an export-led growth model which, logically, cannot be replicated everywhere in the EZ. Until Herr Schäuble and the German government understand this key lesson, Greece - and the EZ as a whole - is doomed."

La Repubblica (IT) /

A couple of tricks to prevent Grexit

With a couple of tricks Athens and Brussels can still avert a Grexit, the left-liberal daily La Repubblica writes: "Compliance with existing rules and agreements is at stake. Other countries like Portugal or Ireland have followed the rules. Meanwhile it is entirely legitimate to start thinking about a deal that confirms the validity of the rules but at the same time obliges both sides to change them as quickly as possible. ... A solution completely in keeping with Brussels' style: turning a blind eye. An agreement with a special trick to it. Several economists have proposed that Greece, faced with the withdrawal of its European financial backers and a lack of euros, could create liquidity for itself without leaving the Eurozone. It could introduce a parallel currency that is only valid within Greece and could be used by Athens to pay pensions, public salaries and to finance the recapitalisation of its banks."

Mladá fronta dnes (CZ) /

Athens should start printing drachmas again

An amicable last-minute solution to the Greek debt crisis is highly unlikely, the liberal daily Mladá fronta Dnes comments: "The new government in Athens should start up the drachma money press. The prospect of the Eurozone's most highly indebted country making an exit seems increasingly more like a cause for relief and less like a threat. ... This departure is not only conceivable, it would also be controllable now. It would act like a shock therapy. The Greeks would be catapulted into poverty and return to a historically weak and frequently devalued currency which for a long time they used to compensate for an incompetent state. Yes, the creditors would no doubt lose a considerable portion of their money. But one of the promises made to Syriza's voters would be fulfilled: they would be bankrupt but free. Admittedly without the euro any more, one must add. Nothing comes for free."

Wirtschaftsblatt (AT) /

Greece eyeing other capital sources

Athens could be looking for alternative sources of capital while the talks with its current creditors continue, the liberal business paper Wirtschaftsblatt believes: "Rumours have been circulating that Russia and China have made temporary financing offers. Russia would no doubt love to muscle in for political reasons, although it's having a difficult enough time servicing its own currency obligations (and those of its key state enterprises) due to the drop in value of both the rouble and oil. It's hard to imagine that it could help Greece out with a few tens of billions of euros. And so far the only news from China has been that no one had heard anything about an offer to Greece. Such financing would certainly be a huge affront to the EU (and wouldn't really aid the negotiations on a new European bailout programme ...), but it is conceivable."