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Germany Stays Tough on Debt Relief for Greece

Germany stood firm against debt relief for Greece the day after the country’s voters issued a resounding “no” to more austerity, signaling a tough fight ahead on one of the few opportunities for compromise on any potential bailout for Athens. About 61% of Greek voters cast their referendum ballots on Sunday in support of Prime Minister Alexis Tsipras’s stance against the pension cuts and tax increases that Greece’s creditors—the rest of the eurozone and the International Monetary Fund— say are necessary to get Greece’s economy going again. That leaves cutting debt as a possible make-or-break element of any deal to keep Europe’s currency union intact. German Chancellor Angela Merkel and French President François Hollande, whose country has emerged as one of the few friendly voices for Greece in the eurozone, made no mention of the debt issue at a joint news conference in Paris. But opposing comments from their […]

Posted On : Published By : Tom Whipple
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With ‘No’ Greek Vote, Tsipras Wins a Victory That Could Carry a Steep Price

Photo Prime Minister Alexis Tsipras of Greece addressed the nation on Sunday amid a referendum on the European bailout. Credit Pool photo by Reuters ATHENS — Now comes the hard part. Prime Minister Alexis Tsipras may have won a victory at home on Sunday as the Greek people dealt a resounding “no” to European austerity policies. But Greece risks paying a high price for that decision. While the vote sharply consolidated Mr. Tsipras’s popularity, that could fade quickly if he leads the country deeper into bankruptcy and financial chaos, creating a new round of instability with consequences for Greece and the broader European project. If anything, Mr. Tsipras is likely to find it harder, rather than easier, to strike a new financing deal quickly with European creditors, heightening the risk that Greece will careen out of the eurozone unless Europe decides to give Mr. Tsipras and his defiant nation […]

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Yanis Varoufakis Abruptly Resigns as Greek Finance Minister

Photo Yanis Varoufakis, the Greek finance minister, before a speech in Athens on Sunday, a day in which voters rejected the terms of a European bailout. He resigned early Monday. Credit Alkis Konstantinidis/Reuters ATHENS — Greece’s combative finance minister, Yanis Varoufakis, who took a strong stand in demanding that creditors write off some of his country’s debts, abruptly resigned on Monday morning. Mr. Varoufakis had played a central role in rallying votes for a resounding no on a referendum on Sunday that asked Greeks whether they were willing to accept an arrangement with creditors that would require considerable further austerity, such as pension cuts. Mr. Varoufakis had threatened last week to resign in the event of a yes vote, and his decision to step down after he and his allies prevailed in the referendum was unexpected. His resignation appeared to be the first move at conciliation toward Greece’s creditors […]

Posted On : Published By : Tom Whipple
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Eurozone Central Bank Now Controls Destiny of Greece’s Battered Banks

Continue reading the main story Slide Show Slide Show|10 Photos Greeks Celebrate Victory for the ‘No’ Side Greeks Celebrate Victory for the ‘No’ Side CreditEirini Vourloumis for The New York Times FRANKFURT — Now that Greek voters have said no to the economic demands of its international creditors, the fate of the country’s struggling banks is in the hands of the European Central Bank . Greece ’s banks, closed since last Monday because they are perilously low on cash, have been kept alive in recent weeks by emergency loans from the European Central Bank. On Monday, the central bank’s policy makers plan to convene to determine how much longer they are willing to prop up the Greek banks, now that the country has essentially said no to the unpopular dictates of the other eurozone countries. No economy can function properly without banks; if they topple, so would the Greek […]

Posted On : Published By : Tom Whipple
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Greek bank closures may deplete supermarket shelves

* Ban on int’l bank transfers crimps local operations * Finance Ministry: Firms can fax requests to wire money * Firms are finding solutions but remain cautious By Martinne Geller and Lefteris Karagiannopoulos LONDON/ATHENS, July 3 (Reuters) – A halt to international payments from Greek bank accounts is hurting Greek businesses and their foreign partners and threatening supplies of vital goods like food and clothing into the debt-crippled country. With banks closed, people limited to withdrawing 60 euros ($66.62) per day and Greece’s future in the euro possibly hinging on a referendum on Sunday, Greek shoppers have been stocking up on essentials like sugar, flour, pasta, rice, beans, canned and paper goods. Shelves remain full for now as retailers have inventories in storage. But capital controls put in place after Greece defaulted on a loan to international creditors have essentially frozen companies’ cash flows and credit. This has severely […]

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‘Yes’ camp takes slim lead in Greek bailout referendum poll

ATHENS Supporters of Greece’s bailout terms have taken a wafer-thin lead over the "No" vote backed by the leftist government, 48 hours before a referendum that may determine the country’s future in the euro zone, a poll showed. The opinion poll by the respected ALCO institute, published in the Ethnos newspaper on Friday, put the "Yes" camp on 44.8 percent against 43.4 percent for the No" vote. But the lead was within the pollster’s 3.1 percentage point margin of error, with 11.8 percent saying they are still undecided. With banks shuttered all week, cash withdrawals rationed and commerce seizing up, the vote could decide whether Greece gets another last-ditch financial rescue in exchange for more harsh austerity measures or plunges deeper into economic crisis. It could also determine whether Greece becomes the first country to crash out of the 19-nation European single currency area, membership of which is meant […]

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Greece needs €60bn in new aid, says IMF

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Plight of Greek pensioners heaps pressure on Tsipras

ATHENS Long lines of pensioners jostling to get into a limited number of banks opened specially to pay out retirement benefits have become a powerful symbol of the misery facing Greece and the problems mounting for Prime Minister Alexis Tsipras. With banks closed down and capital controls imposed to shield the financial system from collapse, the depth of the problems facing the country has become clearer each day. Tsipras’ leftwing government came to power in January vowing to protect pensioners and much of the breakdown in relations with international creditors centered on its refusal to accept the cuts in pensions that the lenders demanded. Mindful of the fact that many older Greeks do not use credit or debit cards and so do not have access to cash machines, it has ordered 1,000 banks to open across the country to pay out a maximum of 120 euros and issue cards. […]

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Cash Crunch Hits Everyday Life in Greece

ATHENS—At an automated teller machine underneath the Acropolis, Angeliki Andreaki clutched her debit card with both hands. She pays her bills in cash, and €330 in rent and €39 in telephone bills were due Wednesday. “Tsipras has turned this country into North Korea,” the 83-year-old Ms. Andreaki said Tuesday, shaking her head about Greece’s prime minister, Alexis Tsipras. “I can’t believe at this age I have to line up to get rationed cash.” She withdrew as much as she could—just €60 ($66)—and went straight to pay her phone bill. She said she would have to come back for five more days to get enough cash for the rent. This is everyday life in Greece since it shut down its banking system and imposed controls to prevent money from flooding out of the country. Greece’s ruling party continued to say it was offering new compromises to its creditors and urged […]

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Mixed Messages and No Progress in Greek Crisis

Photo A woman being squeezed outside a National Bank branch in Athens on Wednesday while waiting to receive part of her pension. Credit Alkis Konstantinidis/Reuters BRUSSELS — Bewildered Greeks, not to speak of people throughout Europe and the world, could be forgiven for wondering who, if anyone, is in charge. In the past few days, Prime Minister Alexis Tsipras of Greece has blown up negotiations with European creditors on staving off default, then retreated and accepted more or less the same terms, only to have European leaders tell him the offer had expired. Greeks are supposed to vote on a referendum this weekend, but no one there or elsewhere seems sure what they will be asked, or what the consequences will be for voting yes or no. And European leaders here and in Berlin and Paris have been saying distinct — sometimes directly contradictory — things about whether there […]

Posted On : Published By : Tom Whipple