RT @NickMalkoutzis: Skai TV reports @J_Dijsselbloem asked Gr PM if #Greece will ask4bailout extension.PM responded "election ended bailout"
— Efthimia Efthimiou (@EfiEfthimiou) January 30, 2015
Friday, January 30, 2015
Greece Bids Farewell To The Euro
Wednesday, January 28, 2015
Germany Pushes For Grexit
On Monday I wrote the following about Greece:
The Institute of German Economic Research (IW) is quoted by the Telegraph:
ZEW research group also added to the calls for Greece, if it won't abide by current agreements, to be pushed out of the Eurozone:
"The reality facing Greece is that as and when Syriza's attempts to renegotiate/renege on the terms of the bailout fail (and they will), Greece will be faced with the choice of continuing with the terms of the bailout or leaving the Euro.A mere two days on, and the plans for pushing Greece out of the Euro are being made public and openly discussed.
As regards the latter, there are already plans in place (in the ECB and banks/financial organisations within the Eurozone) for such an exit which Germany will be keen to implement. Greece has, whether it realises it or not, has voted for an eventual exit from the Eurozone."
The Institute of German Economic Research (IW) is quoted by the Telegraph:
"Financial support must be cut off if Greece does not comply with its reform commitments.In other words the IW wants Greece expelled from the Eurozone.
If Greece is going to take a tough line, then Europe will take a tough line as well."
ZEW research group also added to the calls for Greece, if it won't abide by current agreements, to be pushed out of the Eurozone:
"Europe should clearly signal that it is not susceptible to blackmail."Germany’s finance minister, Wolfgang Schäuble, said:
“Anybody discussing a haircut just shows they don’t know what they are talking about.Let us not be under any illusions, Germany wants Greece out of the Euro. The Greek people have, unwittingly, given the Germans the excuse to push Greece out.
In contrast to 2010, the financial markets have faith in the eurozone.
We face no risk of contagion, so nobody should think we can be put under pressure easily.
We are relaxed.”
Tuesday, January 27, 2015
Greek Bailouts "Money Down The Drain!"
Yanis Varoufakis Greece's new Finance Minister, speaking to Channel 4 News last night, gave a frank and honest view about the bailouts given to Greece over the last few years.
His view?
His solution?
Write off the debts and ask for another bailout!
Brilliant!
His view?
"Money down the drain."
His solution?
Write off the debts and ask for another bailout!
Brilliant!
Monday, January 26, 2015
Greece Unwittingly Votes For Grexit
Greece has voted for an anti austerity coalition led by Syriza.
From the EU's point of view this exercise in democracy is the worst possible outcome. Syriza has vowed to "end austerity" and to renegotiate the bailout package.
However, it is highly unlikely that the political rhetoric will become reality. Whilst the EU does not want a member state to leave the Euro (as that would undermine the doomed experiment), it knows that were it to kowtow to Syriza's demands it would set a precedent for other nations (eg Spain) to demand renegotiations.
The reality facing Greece is that as and when Syriza's attempts to renegotiate/renege on the terms of the bailout fail (and they will), Greece will be faced with the choice of continuing with the terms of the bailout or leaving the Euro.
As regards the latter, there are already plans in place (in the ECB and banks/financial organisations within the Eurozone) for such an exit which Germany will be keen to implement. Greece has, whether it realises it or not, has voted for an eventual exit from the Eurozone.
From the EU's point of view this exercise in democracy is the worst possible outcome. Syriza has vowed to "end austerity" and to renegotiate the bailout package.
However, it is highly unlikely that the political rhetoric will become reality. Whilst the EU does not want a member state to leave the Euro (as that would undermine the doomed experiment), it knows that were it to kowtow to Syriza's demands it would set a precedent for other nations (eg Spain) to demand renegotiations.
The reality facing Greece is that as and when Syriza's attempts to renegotiate/renege on the terms of the bailout fail (and they will), Greece will be faced with the choice of continuing with the terms of the bailout or leaving the Euro.
As regards the latter, there are already plans in place (in the ECB and banks/financial organisations within the Eurozone) for such an exit which Germany will be keen to implement. Greece has, whether it realises it or not, has voted for an eventual exit from the Eurozone.
Thursday, January 22, 2015
ECB's Euro 1 Trillion QE Package
The markets are on tenterhooks today, as they await news as to whether the ECB will launch a Quantitative Easing package worth up to Euro1 trillion.
In the event that reports of this possible package, and its size, are true it would represent twice that which had been expected.
We shall see.
The only certainty is that the ECB has always succeeded in disappointing, when it comes to actions matching rhetoric and rumours!
In the event that reports of this possible package, and its size, are true it would represent twice that which had been expected.
We shall see.
The only certainty is that the ECB has always succeeded in disappointing, when it comes to actions matching rhetoric and rumours!
Wednesday, January 21, 2015
Monday, January 19, 2015
British Gas Cuts Prices By 5%
British Gas has announced that, as from 27 February, household gas prices will be cut by 5%.
Last week E.ON announced that it was cutting gas prices by 3.5%.
The energy companies claim that this is as a result of the fall in wholesale gas prices. This is undoubtedly true. However, with an election in the offing, you can be sure that a considerable amount of political pressure has been applied to these firms to make a "feel good" cut in prices in the run up to the election.
Let us see how responsive these firms are to further falls in the wholesale gas price after the election!
Last week E.ON announced that it was cutting gas prices by 3.5%.
The energy companies claim that this is as a result of the fall in wholesale gas prices. This is undoubtedly true. However, with an election in the offing, you can be sure that a considerable amount of political pressure has been applied to these firms to make a "feel good" cut in prices in the run up to the election.
Let us see how responsive these firms are to further falls in the wholesale gas price after the election!
Friday, January 16, 2015
Greece Running Out of Cash Again
It seems that Greece, or rather the Greek banking system, is running out of cash again (due to increased government borrowing and a run on the banks).
As per ekathimerini.com two Greek systemic banks have submitted requests to the Bank of Greece for cash via the emergency liquidity assistance (ELA) system. It is thought that requests from the remaining Greek banks will follow in the next few days.
As at the time of writing, the amount asked for is Euro5BN.
The ECB will consider this next week. Whilst the ECB ponders what to do, the bank run continues. Let us trust that there will be some banks left there for the ECB to rescue once (if) it makes its mind up.
As per ekathimerini.com two Greek systemic banks have submitted requests to the Bank of Greece for cash via the emergency liquidity assistance (ELA) system. It is thought that requests from the remaining Greek banks will follow in the next few days.
As at the time of writing, the amount asked for is Euro5BN.
The ECB will consider this next week. Whilst the ECB ponders what to do, the bank run continues. Let us trust that there will be some banks left there for the ECB to rescue once (if) it makes its mind up.
Tuesday, January 13, 2015
Inflation at 0.5%
Inflation (CPI) has fallen to 0.5% in December, the joint lowest level ever.
Mark Carney, Governor of The Bank of England, has to write to the Chancellor to explain why the 2% inflation target has been missed, ie why we are in a protracted period of deflation.
As I have noted many times before on this site, there is no way interest rates will be raised anytime soon (despite what the so called economic "experts" and analysts have been warning about for the last few months).
Mark Carney, Governor of The Bank of England, has to write to the Chancellor to explain why the 2% inflation target has been missed, ie why we are in a protracted period of deflation.
As I have noted many times before on this site, there is no way interest rates will be raised anytime soon (despite what the so called economic "experts" and analysts have been warning about for the last few months).
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