- Published on Thursday, 01 March 2012 00:03
- Written by David Böcking, Maria Marquart and Stefan Kaiser
More and more people in southern euro-zone countries are moving their money north amid fears of losing their savings in the crisis. The capital flight makes things difficult for banks back home, but experts say there are no legal measures to stop it. Any steps would probably come too late, they say, and might even endanger the European project.
The case had dominated the headlines in Greece for a week. A Greek parliamentarian was thought to have moved €1 million ($1.34 million) out of the country and into a foreign account last May. Even if the move was legal, many citizens saw it as a betrayal at a time when they were already reeling from deep austerity measures. Other politicians called for the culprit among them to step forward or even down. But no one did.
- Published on Tuesday, 28 February 2012 01:16
- Written by Alexis Papachelas
The people of ancient Sparta, an old story has it, were one day called upon to vote on a certain issue. A citizen who was much disliked among his fellow Spartans came up with a reasonable and quite convincing proposal. It was rejected, but two months later the same proposal was put forward, this time by a different person. It met with comfortable approval.
The same principle applies to the changes and reforms laid out in Greece’s new bailout deal with the European Union and the International Monetary Fund, which was voted in the country’s Parliament last Sunday.
- Published on Sunday, 29 January 2012 17:40
Greece's international lenders think the indebted country will need 145 billion euros of public money from the euro zone in additional bailout rather than the planned 130 billion euros, German news magazine Der Spiegel reported on Saturday.
The magazine said the extra 15 billion euros were needed because of the deteriorating economic situation in Greece, echoing a Reuters report on Thursday.
- Published on Thursday, 23 February 2012 12:59
- Written by David Harris-Gershon
In 2003, Nick Dunbar exposed how Goldman Sachs was working to conceal the size of Greece's debt in order to help Greece qualify for inclusion in the European Union.
At the time, Greek and financial officials claimed Dunbar was "making something out of nothing."
However, today we have a much clearer picture of how – and why – Goldman Sachs indeed helped Greece deceive the world as to the size of the country's debt. And today, we understand the extent of the damage done as the European Union clamors for austerity, clamors to squeeze Greece's most vulnerable citizens for the mistakes of those with money and political power.
For a visual picture, I highly recommend viewing Dunbar's piece for the BBC this week (below) on how Goldman Sachs, with a blind eye from EU officials and at the behest of the Greek government, cooked Greece's books.
- Published on Tuesday, 24 January 2012 16:11
- Written by James G. Neuger and Brian Parkin
Germany floated the idea of combining Europe’s two rescue funds, in a concession to bolster the fight against the fiscal crisis as Greece bargained with bondholders over debt relief.
Germany may be open to boosting the combined aid limit from 500 billion euros ($651 billion) when a permanent fund runs alongside the temporary fund starting in July, government officials in Berlin said. The need for a beefed-up fund was dramatized by haggling between Greece, the trigger of the two- year-old crisis, and its creditors over debt reduction to stave off default.
“It’s essential that we will be able to reinforce our financial firewalls,” European Union Economic and Monetary Affairs Commissioner Olli Rehn told reporters before a meeting of finance ministers in Brussels today.
- Published on Monday, 20 February 2012 14:04
- Written by Erdogan Alkin
When a country’s public debts reach a critical level – mainly because of consecutive budget deficits – to avoid default, either new financial support must be found or the authorities must try to make a deal with the original lenders for a new credit line at a longer term and/or lower interest rates. This is what Greece is trying to do now.
However, even if a new loan is found, lenders obviously ask for some measures (which are called fiscal reforms) to ensure that the new loan is used properly and that there is a timely repayment. The government of the debtor country must first give guaranties to the lenders that they will implement the reforms before making a deal with the parliamentary opposition on the proposed measures. Last, it must convince the people that they need to live a more modest lifestyle to salvage their future.
- Published on Sunday, 22 January 2012 23:05
- Written by Matthew Lynn
Much like Greece, Hungary was one of those small, slightly peripheral countries that most people in the financial markets probably thought they could get through a career without ever worrying about very much.
With a population of slightly less than 10 million, and with a total gross domestic product of less than $200 billion — only half the market value of Apple Inc. — it hardly had much of a claim on the attention of investors.
But right now, Hungary is could be the epicenter of the latest next financial storm.
The country is teetering on the edge of bankruptcy. Its authoritarian populist Prime Minister Viktor Orban is refusing to play ball with the International Monetary Fund. Bond yields are soaring and credit is drying up.
- Published on Friday, 17 February 2012 14:31
- Written by Peter Wilkinson and Irene Chapple
Just one decade after the European single currency was launched amid fanfare and fireworks, its future continues to look uncertain as the debt crisis that engulfed Greece, Ireland and Portugal threatens the entire bloc -- and the wider global economy.
In a bid to resolve the crisis, a majority of European leaders in December reached a deal for a new intergovernmental treaty to deepen the integration of national budgets. Britain refused to back the agreement while three other countries -- Hungary, Sweden and the Czech Republic -- said they would consider the plan.
European leaders were optimistic that a proposed fiscal compact, designed to ensure that governments do not spend beyond their means and rack up unsustainable debts, could be signed by the end of January.
But while solid demand at recent debt auctions in Italy and Spain calmed some investors, a Reuters report Friday that said ratings agency S&P could downgrade several eurozone countries at some point sparked a fresh bout of worries.
- Published on Thursday, 12 January 2012 17:12
Goldman Sachs is facing fresh controversy, this time in the Islamic world, agencies report.
In the prospectus for an Islamic bond, Goldman cited at a number of religious scholars as potentially approving the issuance. But now the controversial $2 billion Islamic bond program faced a fresh challenge on Wednesday as it emerged that at least two scholars named as potential approvers had not even seen the prospectus.
- Published on Wednesday, 15 February 2012 14:05
- Written by Philip Alexander
When Alpha Bank (ALPHA:ATH) and EFG Eurobank Ergasias (EUROB:ATH), the second and third-largest Greek banks, unveiled a merger plan in August, it was widely hailed as the first good news out of the Athens banking sector for a long time.
The move would create the country’s largest bank by some distance, strengthen Greek banking, and bolster the Greek bank presence in the Balkans, where some countries rely heavily on Greek finance.
But now Alpha has warned that it is having second thoughts about the deal.
- Published on Thursday, 05 January 2012 16:09
Fiat Money -Toilet Paper Money
The history of fiat money, to put it kindly, has been one of failure. In fact, EVERY fiat currency since the Romans first began the practice in the first century has ended in devaluation and eventual collapse, of not only the currency, but of the economy that housed the fiat currency as well.
Why would it be different here in the U.S.? Well, in actuality, it hasn’t been. In fact, in our short history, we’ve already had several failed attempts at using paper currency, and it is my opinion that today’s dollars are no different than the continentals issued during the Revolutionary War.