It’s that time of year now for making travel-plans, and so we see this from Vox’s Matt Yglesias:

Ah, but click through to actually read the article! (You do take care to do that every time, right?) Surveying the arguments actually presented there for going to Greece now, what one comes up with is: 1) Greece is cheap; 2) It’s the “right thing to do”; and 3) Greece is pretty safe (here citing figures from, of course, some past, more “normal” period that did not feature closed banks and a full-blown financial crisis).

Actually, Yglesias’ piece inadvertently presents some good arguments why not to go just now. “Bring cash to Greece” warns one of his section-headlines, and rightly so. First of all, more and more places won’t want you to pay with plastic, because current restrictions mean they can’t get quick access to that money. And while it may be true that cash-withdrawals for those using foreign credit- or debitcards are not limited, it’s likely going to be a struggle to find an ATM that has not run out of money.

When you do find one, do not assume that the Greeks’ supposed love for tourists extends to allowing them to cut in front of the long lines in front of those ATMs – so that it may well be empty by the time it is your turn. And don’t think that your efforts towards making it emptier by extracting your foreigner’s amount will be appreciated, either. Then consider the happy hunting-grounds for muggers made possible by the knowledge that everyone is carrying around so much cash, for burglars and room-thieves knowing that everyone has to store all that cash somewhere. (more…)

The tweet reads “High time for a parliamentary investigation into the euro.” Could they be talking about Greece?

For indeed, doubt was thrown on Greece’s continued membership just yesterday, by Finance Minister Varoufakis, in the event that Eurogroup ministers refuse to accept Athens’ own ideas about how to deal with its tremendous burden of sovereign debt. This despite that fact that there is no mention in the treaties underpinning the Eurozone for any member leaving it, much less any prescribed procedure. Still, there is neither any authorization nor prescribed procedure for, say, giving birth during a transcontinental airline flight, yet that does happen from time to time; if/when the emergency arises and Greece just has to return to the drachma, they’ll surely find some way to do it, with or without formal EU treaty provisions.

In any event, this tweet (from the right-wing Dutch political blog Dagelijkse Standaard) does after all call for a parliamentary inquiry, and cuts closer to home. This is a petition directed to the Netherlands parliament, initiated by a group of political commentators led by a certain Thierry Baudet. Still only in his early 30s, Baudet already has a string of publications to his name, most of them in a Eurosceptic vein, decrying the threat to the nation-state posed by the super-national European institutions. More directly relevant, he also succeeded back in 2013 in having a referendum submitted to the Dutch Tweede Kamer – that is, he gained more than the 40,000 signatures required to put it to the attention of the parliament – which was to be “concerning the future of the Netherlands within the European Union.” The Tweede Kamer did duly consider the proposal, then rejected it.

Unsurprisingly, the group behind this latest proposed referendum has its own website, complete with a dedicated page to “Why a parliamentary inquiry over the euro?” Key to their argument is their assertion that it was assumed Northern European lands would allow themselves to become responsible for the fiscal failures of Southern European lands.

Despite what was claimed later, this perverse mechanism was amply foreseen by politicians. As Romano Prodi, president of the European Commission at the time when the Maastricht Treaty was concluded, said, “The difficult moments were predictable. When we created the euro, my complaint as an economist was (and I discussed this with Kohl and with other heads-of-state): how can we have a common currency without shared financial, economic and political pillars? The answer was: for now we have made this leap forward. The rest will follow.”

And:

It continues to surprise us how it could have been possible for such a radical decision to be paired with such little critical debate. What role did the government play here? How is it possible that politicians did not take more care over the financial stability of our country? What did those involved know precisely about the risks? And what did they not know? . . . Did people realize that this euro eventually would make necessary a very great transfer of power over to Brussels – such as the banking union, the stability pact and the upcoming budgetary union?

So they want the Dutch parliament to look into such questions, obviously with a view towards taking further concrete measures should unsatisfactory answers be revealed.

First of all, again, there is no explicit procedure available for any country now using the euro to ditch it for another currency – although, granted, that procedure can be made up on the fly, but surely not with great accompanying financial and economic chaos. More importantly, although this conservative group can probably once again get their 40,000 signatures to bring this measure before the Tweede Kamer as well, the question of the Netherlands in the euro is surely settled for now. There is no sign at all of any truly widespread political rejection by the Dutch populace of the common currency.

Indeed, economic analysis has tended to show that the euro has greatly benefited those Northern European lands heavily involved in trade and able to keep their labor costs in check – such as Germany, especially, but also the Netherlands, both of whom have seen their terms of trade steadily improve since the introduction of the euro in 1999 against Southern European lands with less ability to hold costs down. This widening gap between those advantaged and those disadvantaged by the euro contributed substantially towards getting everyone in the sovereign-debt mess we find ourselves in now – well, except for Germany and the Netherlands (again), plus a few other Eurozone countries (and Denmark) who find that they can actually ask borrowers to pay them to take their money on loan these days, rather than actually pay positive rates of interest.

This initiative must therefore be counted as merely a cry from out of the Dutch conservative wilderness. To the extent anyone takes it seriously, it is surely not constructive, in that doubts concerning any Eurozone member’s commitment to the euro are not useful just now as that grouping has to decide what to do about Greece’s new governing regime and its demands to cut down austerity. It’s rather the Greek people who need to examine the depth of their commitment to the euro, and thereby their level of support for future negotiating maneuvering by their Syriza government which we can surely expect more of in the near future

Unwise! It looks as if the new Greek premier Alexis Tsipras is alienating those within the EU who otherwise could be potential allies.

“Spain and Portugal exasperated by Tsipras’ remarks.”

Tsipras is already under fire to some degree in his home country due to the temporary settlement he reached with the Eurogroup earlier in February which gained for Greece needed additional financing for another four months, but at the cost of what seemed to be several retreats from the ambitious plan to reject outsider-imposed austerity that had led his Syriza party to electoral victory in January. On Saturday (28 February) the French newsmagazine Le Point reported him hitting out at what he perceived as the distinct lack of support he had received in those negotiations from countries you would think were in the same situation as Greece, namely Spain and Portugal, accusing them of wanting to lead Greece down the road to a “financial asphyxiation.”

Top politicians from those two countries were quick to react, including Spain Prime Minister Mariano Rajoy, who told a party gathering in Seville that “[w]e are not responsible for the frustration that the radical Greek Left created by making promises that it knew were unsustainable.” Meanwhile, the spokesman for the ruling PSD party in Portugal termed Tsipras’ accusations “very grave, lamentable and false.”

The thing is, that party gathering Rajoy addressed in Seville was of the Partido Popular, Spain’s right-wing, Christian democratic party, while although that “PSD” of the Portuguese ruling party’s name translates to “Social Democratic Party,” it is also of the center-right. Syriza, as everyone knows by now, is of the Left; indeed, that word is an acronym of the party’s longer, formal name which translates as “Coalition of the Radical Left.”

All this stands to reason when you see how the two Iberian countries are not hitting it off with the new Greek government if only because, clearly, in the context of the on-going EU sovereign debt crisis, “conservative” means plodding onward with the terms of the bail-out packages granted by the infamous “Troika” (made up of the EU – meaning mainly the Eurogroup, but also the Commission – the ECB and the IMF). “Radical,” on the other hand, certainly means trying to break out of that arrangement. Although not necessarily only “Radical Left”: indications are that the neo-Nazi “Golden Dawn” party, and so of the Radical Right, should it come to power – Heaven forfend! I understand that much of its leadership is in jail, anyway – would be similarly dismissive towards the terms of Greece’s bail-out package, or worse.

On the other hand, if everyone would just stop and think a bit, it’s clear that all periphery Eurozone countries still laboring under bail-out packages should have many powerful interests in common. First and foremost, any softening of terms that an aggressive, daring national government might be able to grab/cajole from the “Troika” authorities (going all the way to outright debt cancellation) would naturally be something that fellow countries in the same situation should be able to claim for themselves as well. Such considerations clearly were at least in the back of the mind of German Finance Minister Wolfgang Schäuble and other Eurogroup officials who took such a hard line against the new Syriza government’s proposals. For now, it seems this hard-line faction has managed to keep even other Eurozone countries still suffering under bail-out-mandated austerity firmly within the corral.

Mark your calendars: there’s a serious Eurocrisis coming up, specifically on January 25 when Greece holds elections and the anti-austerity Syriza party will likely come out on top. There’s even a serious argument to be made that it should come out on top, made among others by Economics Prof. Yanis Varoufakis of the University of Athens, who has gone so far as to offer himself up as a Syriza candidate.

He explains why he did that, and what is going on between Greece and the EU generally, in an excellent segment that I’ve embedded for you below (starts at the 4:00 mark). Do keep in mind that, generally speaking, we should all be suspicious of anything coming out of RT (= “Russia Today,” brought to you by Vladimir Putin), and it is easy to be dismayed by the blonde-airhead TV anchorwoman. But this is truly very informative.

(H/t to Yves Smith at Naked Capitalism.)

In this space we recently covered a new political party in Germany dedicated to discarding the euro. But what happens when the same thing happens from the other end of the EU’s economic spectrum?

Yes, you see “Beppe Grillo” there in that tweet, which is written in Italian, and it’s certainly true that Grillo’s “Five Star Movement” is anti-euro. But I’m talking here about a new Greek party, one that was registered by the Athens authorities only last May 2, namely the “Drachma Five Stars Democratic Movement” which in its very name pays homage to Grillo’s Cinque Stelle (= “Five Stars”) movement.

What does this new party want? Mainly a referendum in Greece over whether to stay in the Eurozone. But it does have a formal five-point program:

1. Renunciation of the Memorandum signed with the “troika” (EU, European Central Bank, IMF) which has imposed the current austerity policy in return for financial help;
2. A return to the drachma;
3. “Self-development” (meaning unclear);
4. Social justice; and
5. National dignity.

This piece by Gabriele Vallin in the Huffington Post’s Italian edition does not indicate how much popular support this “Drachma 5-Star” party has attracted, but again, it’s brand-new. It does feature an interview with the party’s founder, Theodore Katsanevas, Professor of Labour Economics at the University of Piraeus. (more…)

As everyone knows by now, the 2012 London Olympics open in just two days’ time. This blog is not so very interested, at least from an athletics point-of-view, although perhaps noteworthy incidents might still arise.

Meanwhile, Christian Hönicke from the German business newspaper Handelsblatt approaches the Games from a proper business perspective to expound on How metropolises profit from the Olympics. Yes, the medals-won table is already there over on the right side (all zeros for now, of course; “Afghanistan,” “Albania,” and right on through) and Hönicke’s piece is regularly interrupted by mini-accounts of past medal-winners, but the text itself provides a good treatment of the question: “Is it worth it for a city to host the Games?” (more…)

As much as everyone may desire it, it may ultimately prove impossible to separate the Euro 2012 Football Championship from wider political matters of the real world. We already saw last Friday, with Germany-vs.-Greece, a football game already fraught from being a tournament quarter-final, after which the loser would be sent home, gain even more of an edge from geopolitical considerations, as the Greeks were especially anxious to gain a bit of revenge against the country whose financial hard-heartedness many of them see as responsible for their current economic meltdown.

Alas, they did not get their wish. But consider: now that we know the results of the first semi-final it is clear that, having already beaten Greece, the German team’s path to the European championship now lies in beating Italy, and then beating Spain in the final – “PIGS” countries all of them! These are the post-WWII Germans, though, you must remember, so that inevitably the question is arising: Given these circumstances, should Germany be allowed to win the 2012 European football championship even if it can?

That’s literally the question Spiegel writer Jan Fleischhauer poses in the title to his opinion-piece. His lede:

The Left is again afraid that foreigners don’t find the Germans nice enough. Some even wish for a defeat of the national football team against Italy. But Germans are much more popular with foreigners than most think.

Yes, apparently this continued feeling of shame and unworthiness is to be found primarily among Left- and Green-inclined German voters, some of whom have taken to stealing German flags sticking out of cars and leaving behind notes accusing those drivers of fostering nationalism.

This is comical stuff, although it does seem to be really happening. But it’s so unnecessary because, as Fleischhauer points out, in reality Germans are currently riding an extraordinary wave of popularity (which apparently goes for the kind of football they play as well). He cites a recent Pew Research Center study showing that Germans are admired by all other Europeans for their honesty and hard work. Chancellor Angela Merkel has profited from this to become rather popular throughout the continent herself – other than among the Greeks, that is.

But there is a larger point here, and once again it relates to “real life,” specifically the enormous financial crisis with which the continent is now wrestling. Everyone is now earnestly looking to Berlin to fix it! What, should we instead turn to Paris and François Hollande? Perish the thought! No, if anyone holds in their hands the solution to this financial turmoil and uncertainty, it’s the Germans (largely by being willing to pay to clean up other countries’ messes, it has to be acknowledged!). For Heaven’s sake, let them step up and do that – and should they win Euro2012 along the way, then that is no problem.

UPDATE: It’s no problem, alright: Germany 1, Italy 2!

One could opine that the clear assumption in Fleischhauer’s article that the German team would of course win the semi-final and go on to face Spain in the final reflected a certain German arrogance. But then we would be dealing here with a strange mixture of arrogance (“Of course we’ll win”) and humility (“But should we be allowed to?”).

Here’s a disturbing fact that got lost in the widespread (fully unjustified) relief that greeted New Democracy’s victory in the last Greek elections: that “Golden Dawn” party, basically a bunch of neo-Nazis, once again gained 7% of the vote, despite a scandalous TV appearance by one of that party’s leading politicians just prior to this second vote, in which he threw water at as well as actually struck a pair of women panelists who took exception to the far-right opinions he was expressing.

This news tidbit we get in a report out of Athens from Die Tageszeitung reporter Schwabinggrad Ballett (sic; you’ve got to hope that is some sort of nom-de-plume) entitled The Social Holes.

In fact, Golden Dawn’s pre-election outrages were not confined to the TV studio, but also extended to the streets (in the best private fascist army tradition – look up e.g. the Nazi SA, Mussolini’s Black Shirts) where they went around bashing immigrants. Still, they seem to have provoked little if any backlash, other than occasional anti-Golden Dawn demonstrations organized in immigrant communities. The author worries whether we are seeing here the granting of political legitimization to Golden Dawn which most feel they do not deserve.

But it gets worse. Ballett cites figures of between 17% and 25% support for Golden Dawn from the special ballot-boxes where police can go to vote on election day as they take a brief break from duty to do so. What is more, it seems that the party has even started engaging in providing an impressive list of social services to residents of a particularly supportive Athens neighborhood called Agios Panteleimonas: supplying medicines and food to those who need them, taking emergency cases to the hospital, and yes (it’s in the article, though I can’t tell if Ballett is being serious here), helping little old ladies across the street. After all, by and large provision of these sorts of services from the government has melted away, since that government can’t afford them anymore; that’s the meaning of this piece’s title, Social Holes. Golden Dawn leaders may not exactly be as crazy as everyone thinks.

You might want to click through and check out as well that rather chilling picture at the top of the article, apparently of a Golden Dawn street demo – looks like something straight out of Apple’s famed “1984” TV advertisement.

Politically, this has been a most eventful week in the Netherlands. As we head massively onto the streets today in our orange apparel to celebrate the QueensDay holiday, many of us will drink and dance in the sunny weather in part simply to forget the experience of the government falling, followed by the cobbling-together by a hastily-formed temporary coalition of a budget-cut package to meet EU demands.

So yes, it has been a remarkable past couple of days. This, however, just goes too far:

“Has the European Spring begun in The Hague?” asks commentator Paul Brill – as in “Europe’s Arab Spring,” you understand.

Thank God for that question-mark, for actually going through his piece makes it clear that Brill is hardly sure himself that the answer is “yes.” (What we also might have here is a rogue third-party headline-writer; I understand that column-writers for periodicals – as opposed to bloggers – usually don’t write their own headlines.) What makes Brill (or his headline-writer) think of the Arab Spring is the series of “No!” gestures to the EU austerity regime – mostly being pushed by Germany – now in the cards. You have the French presidential election run-off next Sunday, which according to most polls will elevate François Hollande to that position, who will then reject the EU’s new Austerity Pact. On the same day there will be national elections in Greece, and polls there forecast a defeat for the PASOK and New Democracy parties – now ruling in a grand coalition, but for decades the two main competing parties representing (respectively) the Left and the Right on the Greek political scene. As of next week they will likely be superseded by brand-new parties, all of them promoting resistance to the terms of Greece’s bail-out from the IMF, EU and ECB.

And then the Netherlands: Once seen as reliably in Germany’s austerity camp – indeed, Finance Minister De Jager has made quite a name for himself as scourge and hector of those irresponsible, debt-ridden Southern Europeans – this country effectively made its first substantial anti-austerity gesture with the collapse of the government, brought about when the right-wing, populist PVV party would not go along with the budget cuts being proposed. Yes, as stated, enough budget cuts to satisfy the EU were ultimately approved anyway via a one-time reshuffling of the political deck, but the fact that the PVV was effectively part of the governing coalition (it “tolerated” it, i.e. promised not to vote against it on important matters) meant that there would have to be new elections (in early September), to form a new government.

Notably, a couple of important parties held themselves aloof from those budget cuts, namely over on the Left in the forms of the Labor Party (PvdA) and the Socialist Party. The strategy here was clear: they won’t be tainted by those budget cuts in that election, so that a vote for the Left offers a means for the Dutch electorate to vote against budget cuts and austerity, and basically to join the likely French and Greeks “No!” against the EU austerity regime.

So that is what is really going on here. The Greeks and the French seem unlikely to accede to German demands for EU member-state austerity as the best way out of the financial and sovereign-debt crises. But the Dutch – the Dutch! those traditional lap-dogs of the Germans! – now seem quite likely to do the same. If they do that, however, they’ll do it in September, so forget about any “European Spring.”

For that matter, let’s give the peoples of Tunisia, Egypt, Libya, Syria, etc. some proper respect for what they have accomplished/are accomplishing and simply drop any further hyperbolic talk about a “European Spring,” “Autumn,” or anything else. The Europeans have their own notable Days of Revolt to their credit in history, but they were back in 1789, 1848 and (to the East) 1989, and certainly not today.

ELSTAT: you know, it’s surprising this acronym is not better-known within the context of the economic crisis that has been raging since (roughly) 2008. And I mean in a negative sense, the way names such as Lehmann Bros., Goldman Sachs, Royal Bank of Scotland, Northern Rock, etc. now call up unpleasant associations among most economic observers.

For ELSTAT is the abbreviation (from the Greek) for the “Hellenic Statistical Authority,” the Greek government’s official statistical agency. If you are of the view that Greece never belonged in the Eurozone in the first place – and many are, including French President Nicolas Sarkozy – then ELSTAT is your villain, as it was the false statistics it submitted in the 2000-2002 time-frame which led Greece to be admitted into the club when it was not ready, and may never have been. Similarly, ELSTAT was involved back in late 2009 when Georgios Papandreou won the national elections and became Greek prime minister, only to announce shortly thereafter that his country’s fiscal situation was way worse than he, the EU, and the general public had been led to believe (by ELSTAT) – and that was what kicked off the long-running Greek sovereign debt imbroglio which even last Monday’s deal with the “troika” (EU, ECB and IMF) has surely not definitively solved.

Anyway, there’s a new ELSTAT scandal now, and Dirk Elsner over at @blicklog tips us off:

There’s also an article to the same effect in the Czech press, spotted by @Zpravy:

What is going on? Well, once again ELSTAT’s numbers are said to be in error, and that for a political purpose. This time, however, you can say that the alleged fraud is in the opposite direction: numbers not falsified to fool outsiders, but rather to fool the Greeks themselves! The Athens public prosecutor now asserts that the Greek budget figures were actually exaggerated back at the end of 2009 – just after Papandreou had taken office – and this at the request of the EU. Specifically, the EU wanted to see a budget deficit figure of 15.4% – and duly got it – rather than the 12% which was reality. Why? For ammunition to use to browbeat the Greeks into the tough austerity measures they passed/started to pass then.

A Greek parliamentary committee is going to look into this. For now, the suspicion remains that ELSTAT is an agency not to be trusted by anyone, whether on the home or the visiting team. There is also sure to be an additional, unpleasant political effect if the Greek electorate starts to feel it was misled into adopting the painful budget/pension/wage cuts the government undertook to mollify the EU and to deal with its fiscal situation.

One famous result of that climactic, all-nighter European summit of last 26/27 October was that Greece’s creditors would have to accept a 50% “haircut,” i.e. resign themselves to getting back only half (approximately) of the value – principal + interest – that they thought they were going to earn when they first loaned the money. But what does that mean exactly, in terms of specifics? Well, that’s going to depend on negotiations between Greece and those creditors – and from a certain little dog we get an early tweet about how those might look:

Yes, it’s fitting that this is a little Luxembourg dog! (Actually, the piece to which it links – with the second link, not the first – itself passes on the original scoop from the Greek newspaper Kathimerini, via Reuters. But unfortunately we don’t do Greek here at €S.)

Here are the alleged options on the menu:

• Per €100 of debt, creditors will get somewhere between a €10 and €20 cash-payment; for the rest, they get between €30 and €40 (again, per €100 of debt) in a brand-new debt security with a term of between 20 and 30 years and yearly interest of about 6%.
  
• OR else they could have just €37 per €100 debt wiped out entirely and for the rest get a 15-year bond with interest “somewhat higher” than 6%. That sounds a bit better, yes; that’s the proposal from the Institute of International Finance (IIF) which is negotiating for the private creditors.

Anyway, for what all that is worth: the Luxembourg Tageblatt article here is careful to point out that the original Kathimerini piece was “without indication of sources.” So do you trust Greek journalists?

Many of you reading this blog must surely also subscribe to, or at least read regularly, Paul Krugman’s NYT blog The Conscience of a Liberal. It admittedly blows this blog away in influence terms, as it is currently ranked #41 on the Technorati list. But is the Nobel prize-winning Princeton economist as ready to bring forward the often piquant opinions resulting from his economic analyses away from home, so to speak, i.e. when on some forum than his own blog?

Of course he is! Lately what has been dominating the economic front has been the Eurozone, especially Greece and Italy. Even when interviewed by a leading German newspaper, Krugman does not hold back, as we can see in the extended interview published on-line by Die Zeit last Friday: “The euro will mutate into an extended Deutschmark”. (more…)

Greece prime minister Papandreou announces a referendum over the anti-bankruptcy aid package for his country announced at last week’s EU summit – and all hell breaks loose on world markets!

Yes, every other newspaper is writing about this as well, but this particular Die Welt article, by D. Eckert and H. Zschäpitz, stands out for its headline: Papandreou risks a global financial meltdown, or rather the alarm such a headline evokes in contrast to the serious, mainstream sort of paper we all know Die Welt to be – i.e one that doesn’t usually resort to such headlines. Yes, there are no doubt similar-sounding titles in tabloid papers, and not just in Germany, but all that is mere dog-bites-man.

This piece also stands out for the handy list it provides – you have to scroll down a little, look for Die größten Wertverluste . . . – of the banks which have lost the most market-capitalization, so far, from the plummeting prices of their shares. FYI, BNP Paribas stands at the top, with nearly €4.7 billion lost, followed by Deutsche Bank. (It also stands out for author “H. Zschäpitz”: isn’t that just a howler of a name? But no doubt the fellow has a Google Alert on it and will be reading this blogpost sooner or later – my apologies!)

Otherwise, though, I stand vulnerable to the charge of European tokenism. Because the piece that has really clarified things for me is in English, and written by our old friend Dana Blankenhorn. Greek Latest is Solar Scam is its title, it does spend a few paragraphs dissecting the faulty economics behind a Greek solar-energy investment plan. But then it addresses what Papandreou and the Greek authorities are really trying to do with this referendum. Given that Blankenhorn assumes that the result will be “No,” it’s simple: they are threatening to take the rest of Europe to down with them, unless they get an even-better debt-relief deal than the 50% they got from the EU last week.

You should check it out, and the article from Seeking Alpha that Blankenhorn links to as well. Strangely, his link to it reads “Sink the euro” even though that other article itself argues that there is still a chance for a “Yes” vote!

Let’s now get away from Dominique Strauss-Kahn – hopefully for quite a while! – and turn our attention to serious matters, like, say, saving the euro. One big roadblock to doing that is the increasing refusal by the electorates of solid, solvent, predominantly Northern European EU member-states to pledge more money to bail out Greece. “Why should we do that,” Germans ask for example, “when those lazy Greeks all get to retire at age 55?”

Now Patrick Saint-Paul of the French newspaper Le Figaro, possibly acting out of some sense of Mediterranean solidarity, offers a riposte that the Greeks can use: Germans go to sleep on the job! Or at least they soon might do so: the article discusses a recent proposal by a high official of the DGB (Deutsche Gewerkschaftsbund, one of the country’s biggest unions) that all German workers should have the right to a “siesta” on the job, i.e. a period in the early afternoon to just go take a nap.

Of course, the suggestion is being offered not as a concession to labor but rather as a clever way to enable them to be even more productive. “A siesta reduces the risk of heart-attack and allows one to resume work full of energy,” states Annelie Buntenbach of the DGB’s governing board. Then there’s this from the inevitable expert-professor, this time one specializing in “psychological biology”: “A rest at noon permits one to make up for a period of weak productivity and occurs just at the point where chances of an accident are at their highest.”

Anyway, Saint-Paul goes on to mention that, although everyone thinks Germans work harder than Greeks, that isn’t necessarily true: OECD statistics purport to show that the former work only 1,390 hours per year and the latter 2,119. But that might just be a difference without any true distinction.

Enough of the levity (see previous). It’s time to get serious – even “apocalyptic.” Specifically, The apocalyptic cost of the collapse of the Eurozone, a recent entry on the blog of Libération’s famed Brussels correspondent, Jean Quatremer.

That article basically calls attention to a recent, publicly-available and English-language study from ING Bank (main writer: Mark Cliffe) entitled “EMU Break-up: Quantifying the Unthinkable.” It’s quite an eye-opener, and Quatremer has performed quite a public service in calling his readers’ attention to it. For the “unthinkable” when it comes to the euro has become quite a bit less so this year, including the two “unthinkable” extremes between which Cliffe structures his report’s analysis: 1) The departure from the Eurozone of Greece (only), and 2) The collapse of the whole thing, with the current member countries simply reverting to their currencies of prior to 1999. Both developments, and various others in-between, have increasingly been raised as distinct real-world possibilities, and not just as horror-scenarios but also as measures to be induced deliberately (particularly the ejection of Greece) as punishment for the fiscal failings of various naughty governments. (more…)

You might have become aware late last week of a brief kerfluffle involving the new Hungarian government of Prime Minister Viktor Orbán. It didn’t involve Orbán directly, however, only some figures closely associated with him, such as another top figure in his FIDESZ political party, Lajos Kósa (mayor of Hungary’s second city, Debrecen), and Péter Szijjártó, his government spokesman, who together spread the word to the world at large that the Hungarian budget deficit was actually rather higher than previously reported and that their country could soon find itself in a simlar fix as Greece. This quickly led to a mini-financial panic breaking out the world over – including in Far Eastern markets, which suffered price-losses – at the thought that the EU suddenly had another fiscal basket-case member-state to deal with, one that moreover had already had a joint EU/IMF bail-out back in 2008.

“Sorry – did we say that? We weren’t really serious” was roughly the reaction from that same Hungarian government once they realized the wide-ranging storm their comments had unleashed. Clearly, the amateurs were now in charge within that government’s highest reaches, and you can get a quite informative treatment of the incident – with pictures of the major protagonists – from the realdeal.hu weblog. There writer Erik d’Amato makes a convincing case that all this was simply an attempt by the new government to position itself politically to impose some austerity measures in its upcoming budget, albeit one that went spectacularly awry.

But such incompetence cannot go unremarked upon for long, and as the Danish daily Politiken reports (Hungarians go off on top politicians’ mysterious pronouncements) feedback has now started to arrive. For one, the economics editor of one of the major national dailies, Zoltán Baka of Népszabadság, called last week’s pronouncements “completely idiotic.” The IMF chief, Dominique Strauss-Kahn, also told the Associated Press that, in his view, there is “no basis to be worried” about Hungary’s fiscal situation. Other European finance ministers, however, couldn’t be bothered to offer an opinion: they are busy these days trying to find a solution to the ever-weakening euro, whose recent downward course last week’s Hungarian mini-fiasco only served to accelerate.

You’re surely all aware of the big current European story: that minor matter about saving the euro from tremendous speculative pressures on its currency, in light of a threatened Greece sovereign bankruptcy which threatens to drag down further other vulnerable EU sovereign borrowers as well. As always, my policy in approaching this topic is to consider only those non-English-language articles which add something to the discussion that my readers are not likely to have already seen elsewhere in the English-language press. So I admit I haven’t provided much coverage as yet, other than the translation of the French Finance Minister interview yesterday/below.

Then again, that’s also a little disingenuous; a unique viewpoint on virtually any European economic or political issue is almost always to be had from L’Humanité, the organ of the French Communist Party. Naturally, those folks have also been glad to hold forth on the new measures and funding facilities arising from last weekend’s Eurozone crisis meetings over the Greek debt problem, as we see in the piece by Bruno Odent provocatively entitled Euro: the plan aimed at saving the hostage-takers. (more…)

Even as the first Greek act in the developing euro-crisis plays on – now with fatalities, as three people die during violent demonstrations in Athens – the focus of public attention is starting to shift to a feared second act in other countries with similarly weak finances, like Portugal or Spain. With that come calming assurances from high EU officials, like EU Council President Herman van Rompuy (remember him?) who characterized any such fears of financial contagion as “irrational.” Going to the horse’s mouth, though – so to speak – we find them to be anything but, as we can see from an article by Luis Doncel (Spanish risk runs rampant) in the mainstream Spanish paper El País. (The hat-tip for discovering this article goes to Eurointelligence – in English, of course – whose piece itself offers a potpourri of interesting current news items on the Greek crisis.) (more…)

Writing in the Walloon (i.e. Belgian-French) business newspaper L’Écho, in a piece somewhat sarcastically entitled The euro, our Savior, Marc Lambrechts makes a brief macroeconomic survey of the current European scene and comes up with a couple paradoxes. It looks like everybody is feeling better now about the business conditions, as surveys carried out within the Eurozone among both businessmen and consumers show. But this might be nothing more than spring-fever; Lambrechts prepares us for the shock that first-quarter 2010 economic reports are going to bring, showing a marked slowing-down then (e.g. German GDP drop of 0.4%) caused mainly by the severe winter weather and the sharp drop in auto-sales from the expiry of all those national “cash-for-clunkers” purchase-subsidy schemes.

Surely recovery will come about eventually, although with regard to Europe generally economists at the OECD are not optimistic about that happening until the second half of this year. One way for Germany to expedite that for itself, though (since the Germans earn so much from exports), is to get the euro to fall in value against the other major world-currencies – a process to which nothing has contributed more lately than the continuing confusion in the financial markets over Greece’s fiscal problems, which German obstinacy and tight-fistedness at the EU level has only prolonged. “A curious paradox,” Lambrechts calls this.

UPDATE: Strangely, the performance-vs.-confidence balance seems to be reversed in the US, as per this article from the New York Times.

Today is the day EU heads-of-government convene in Brussels for yet another summit. There will be an elephant in the room, a problem that needs to be handled – Greece, of course – but which some (mainly, but not only, Germany) don’t want to handle just now. So, bizarrely, the summit meeting itself will not have Greece on its agenda; rather, there will be a meeting called of all Eurozone heads of government (16 of them) just prior to the main summit event to address the Greek problem.

I learn this from the preparatory blogpost to the summit provided by the Economist’s “Charlegmagne” correspondent, and I have to admit that, here, that source (in English, of course) is the best provider of information and analysis that I have been able to find. Among other things, his main insight (as embodied in his column’s title, “Why Greece is not suffering enough yet”) that Greece will only be bailed out after it has been forced to suffer considerable economic pain – namely to set an example to other potential fiscal miscreants – is spot-on. And he also reports (although indirectly, from FT sources) the very valuable information of what Germany is demanding to help Greece: 1) Greece must first exhaust all other sources of finance from the markets; 2) It must then get as much as it can from the IMF; and 3) Then Germany will help, but will at the same time demand “tough new rules on debts and deficits that will impose more budgetary discipline than before, even if that involves changing the treaties.” (more…)

The financial travails of the Greek government go on, and will do so for some time even in the best of scenarios. So at least one thing is fixed: simple arithmetic quite clearly shows a noticeable imbalance in that country’s public financial resources and the amounts it customarily spends. Unfortunately, all other considerations surrounding that predicament and how best to address it seem to be stuck in a kaleidoscope-like flux.

Take for example the blogpost found on this site a couple weeks ago: there, resort to the IMF to assist Greece out of its bind was unthinkable, and the proposed solution – suggested by no lesser figure than the current German Finance Minister Wolfgang Schäuble – was instead to set up some sort of Monetary Fund within the institutions of the European Union. You can scratch that now; according to no less than Bundeskanzlerin Angela Merkel (who of course outranks Schäuble), IMF involvement would be perfectly OK and, if there is to be some sort of within-the-EU Monetary Fund, then it certainly won’t be able to appear in time to have anything to do with solving the Greek case. Oh, and another point I made was that the preferred technique so far of EU heads-of-government for dealing with the Greek situation was simply to issue declarations of support without actually doing anything to back them up, and that is also no longer completely true. Mind you, it’s not that the EU leaders now are trying to back them up; it’s that some, such as Bundeskanzlerin Merkel, don’t even want to talk about it any more, including shutting Greece’s problems off of the agenda for another EU summit meeting scheduled to be held next week.

But it gets even worse, as we see in an article in today’s issue of the Dutch business newspaper Het Financiële Dagblad. Merkel now is willing to countenance IMF involvement, but Nicolas Sarkozy still insists publicly that that is out of the question. Furthermore, the French President (together with Jose Manuel Barroso, Chairman of the European Commission) does want to talk about Greece at next week’s summit, at least to the extent of issuing another ringing declaration that the country will not be let down by its EU brother-states – thereby accomplishing a lowering of its borrowing costs, at least for a while.

Unfortunately, it seems that an IMF team has already been called in to take a look at the Greek situation, according to this HFD piece. Plus, the suspicion remains (although it is mentioned elsewhere, not here) that Sarkozy mainly wants to shut out the IMF in order to deny credit/glory to that organization’s head, Frenchman Dominique Strauss-Kahn, who might well run in 2012 to replace Sarkozy as French president. But this now-open disagreement on fundamental aspects of how to deal with the situation between the heads of the EU’s two leading states can only worsen investor confidence in Greece’s finances, and thereby the situation as a whole.

Greece has been having its well-known fiscal problems, but there’s no way that it should resort to going to the International Monetary Fund for money to help out. Quite apart from some technical problems with that approach (e.g. the IMF generally tells you what to do with your monetary policy, in exchange for getting its money; as a member of the Eurozone, Greece has no control over its monetary policy), that would simply be an intolerable political gesture showing the world that the European Union is incapable of cleaning up its own financial problems.

But then what is the EU to do in light of continuing Greek fiscal weakness? Why, set up its own version of the IMF! Call it, for now, the EWF (Europäische Währungsfonds) – yes, using the German term, since it was German Finance Minister Wolfgang Schäuble who got the whole idea started with remarks he made this past weekend. But the idea was further endorsed (at least in a vague way) yesterday by the EU’s man-on-the-spot Olli Rehn, the new EU Commissioner for Economic and Monetary Affairs. For now, it is still nothing but an idea, but that also means it can go in any of a number of directions, something pointed out in the very title of an analysis in the German commentary newspaper Die Zeit: The Fund can be a savior or a bankruptcy-administrator. (more…)

More on the Greek debt crisis from Naked Capitalism: German Paper Says AIG May Have Sold CDS on Greece. That German paper would be the excellent business-sheet Handelsblatt, and the full translation of the article into English which that blog’s proprietor requests in her post follows after the jump.

UPDATE: Correction! Looking at that original German piece, it clearly comes originally from the Frankfurter Allgemeine Zeitung or FAZ – often called Germany’s own New York Times. I have noticed before how the two papers clearly have an arrangement allowing Handelsblatt to reprint certain FAZ material. Credit where it is due . . .
(more…)

Over on the financial blog Naked Capitalism today there are some very interesting links concerning the seemingly nefarious role Goldman Sachs has played in the recent past with the Greek government, that government’s attempts to both hide its debt and to find ways to fund it, and with the Eurozone in general.

The headline link is to a very revealing blogpost by Jean Quatremer, Brussels/European correspondent for the French newspaper Libération – but the link is only to the French original. Herewith my translation of that, after the jump, complete with the links Quatremer uses within his piece (other than when they go to Wikipedia or to general homepage sites): (more…)

I have to assume that my Euro-savvy readers will be quite aware of the growing financial crisis involving the euro and the so-called “PIIGS” countries that are in fiscal trouble (“Portugal, Ireland, Italy, Greece, Spain,” though these days Italy is usually left out). Greece is at the center of attention now, and the main issue when it comes to its fiscal problems – combined with its government’s dishonesty in reporting these in the past – seems to be the conflict between the emotional impulses to bail it out from EU or European Central Bank funds or punish its sins instead by simply letting the country suffer. The EU summit in Brussels on Thursday (11 February) is shaping up to be decisive in deciding which way things will go – assuming that the assembled EU heads of government discuss the problem in the first place, as I understand that that is not really on their formal agenda!

The dominant EU country within the governing structures of the EU and the European Central Bank is of course Germany, which is also the main economy in an opposite fiscal situation to that of the PIIGS states and so theoretically able financially to provide much of the aid that Greece needs. That is why it has been interesting to read coverage of this problem in Die Welt, the mainstream German paper not quite as authoritative as Die Zeit (and the latter is more of a pure opinion-publication anyway), but still with a respected reputation as a daily that is distributed nationwide. (more…)

These are weird times; governments around the world are doing some strange things, generally in response to urgent budgetary pressures. You might have read in the New York Times about how the Australian navy is about to let its sailors go off on a two-month leave – the report was even on the homepage of that newspaper’s website for a time. And now word comes from the Dutch newspaper Trouw: Athens government to free half of its prisoners.

(It’s true that articles of this sort referencing happenings in another European country would usually cause me to go to that other country’s on-line press to seek more first-hand reports there, but in this case all I can do is plead “It’s all Greek to me!”)

That’s around 6,000 convicted criminals that the Greek authorities are planning to release, pending approval by parliament, according to an announcement by Sotiris Hatzigakis, the Greek Justice Minister. But there may be another 1,500 added to that if he also is allowed to institute another measure reducing the allowable duration of what the Trouw report (credited to the ANP press agency) terms “temporary custody,” which I interpret to mean pre-trial detention – so at least many of those added 1,500 may not be actual lawbreakers.

Why do they want to do this? Overcrowding. If 6,000 is the half, then that means that there are around 12,000 inmates in Greek jails, which the article reports have an official capacity of only 7,500. And how can they be sure that the jails won’t just fill up to bursting again? Well, it seems that drugs laws in Greece are somewhat stricter than the EU norm. (Who would have thought it?) “In the long run,” as the Trouw article puts it (op de lange termijn), the parliament is supposed to take up the task of adjusting those laws accordingly.