The bear market by the numbers, below. by Ye Xie By any standard, the selloff in Chinese stocks over the past month has been epic. Here’s a look at the turmoil by numbers. The Shanghai Stock Exchange Composite Index has…
Council on Foreign Relations compares Germany’s hardline stance with US policy towards Britain at the end of the Second World War Professor Michael Burda, from Berlin’s Humbolt University, said the eurozone’s core problem is Germany’s current account surplus Photo: AP…
The Yamal large landing craft (RIA Novosti/Alexey Kudenko) The Russian naval presence in the Mediterranean Sea will be boosted by another military vessel till the end of September, according to the country’s Black Sea Fleet command. The large landing ship,…
Rich, powerful meet secretly in Greece Astir Palace Hotel Resort, reported site of this year’s Bilderberg Group meeting WASHINGTON – The latest meeting of the secretive, half-century-old Bilderberg Group concluded yesterday outside of Athens with a few arrests, but little…
By Reuters If Greece left the euro, living standards would plummet, incomes would be slashed by more than half, and inflation and unemployment would skyrocket, the National Bank of Greece warned on Tuesday.
In a report released ahead of an election on June 17 that may determine whether the country stays in the single currency, the country’s biggest bank said the risk of Athens exiting the euro was no longer just a theoretical possibility, warning that the fallout from such a move would be dramatic.
“An exit from the euro would lead to a significant decline in the living standards of Greek citizens,” the NBG wrote ahead of a vote which parties opposed to austerity measures that have kept Greece in the euro so far have a chance of winning.
The bank said per capita income would collapse by at least 55 percent, the new national currency would depreciate by 65 percent against the euro and a recession, now in its fifth year, would deepen by 22 percent.
By: Ralph Atkins in Frankfurt
There has been no official announcement. No terms or conditions have been disclosed. But Greece’s banking system is being propped up by an estimated €100 billion or so of emergency liquidity provided by the country’s central bank — approved secretly by the European Central Bank in Frankfurt. If Greece were to leave the eurozone, the immediate cause might be an ECB decision to pull the plug.
Extensive use of “emergency liquidity assistance” (ELA) to help banks in the weakest economies has been one of the less-noticed features of the eurozone crisis. Separate from normal supplies of liquidity and meant originally as a temporary facility for national authorities to use when banks hit problems, ELA proved a lifesaver for the financial system Ireland and is now even more so in Greece. As such, it has given the ECB — which has ultimate control over the facility — considerable power to determine countries’ fates.
Whether that power would ever be exercised is unclear. ELA is a subject on which the ECB is deeply reluctant to provide information — even on where or when it is provided.
By Joel Hills
Greece’s former finance minister has told Sky News that if Greece reneges on its bailout deal with the EU and the IMF it will “open the door to hell”. Sky News last interviewed George Papaconstantinou two-and-a-half years ago.
In December 2009 he told how Greece could survive independently and Greece’s creditors had nothing to fear – they would get back every euro they were owed.
A lot has changed since then.
Greece is in the process of borrowing 240bn euros of emergency loans from the EU and the IMF (in return for pledges to raise taxes, cut spending and balance the books) and investors holding Greek debt have been forced write off up to 50% of their money.
By Joe Weisenthal
Paul Krugman has a gloomy post this evening explaining how quickly the whole Euro could unravel.
It basically goes like this: Greece leaves the euro “very possibly next month.” That would lead to a massive run on Italian and Spanish banks. There would be massive borrowing from the ECB to prevent a banking collapse. At which point Germany has to decide: Shoulder a major burden for the debts of Spain/Italy, etc., or let it all go.
He concludes: “And we’re talking about months, not years, for this to play out.”
This might be extreme, but it might not be, but the key is that it would be a Greek departure that would set it all off. A country leaving the Eurozone would have terrible consequences, which everyone realizes, and actually that part of the reason that investors don’t think it’s going to happen — because it would be so bad.
By GABRIELE STEINHAUSER and SARAH DiLORENZO The countries that use the euro pulled Greece back from an imminent and potentially catastrophic default on Tuesday, when they finally stitched together a euro130 billion ($170 billion) rescue they hope will also provide a lifeline to their common currency.
But the patchwork of measures – including the implementation of austerity measures in Greece and approval by skeptical German and Dutch Parliaments – required to give the rescue even a chance of success means it’s unlikely to be the end of the continent’s debt crisis.
European markets edged lower, having enjoyed solid gains in the run-up to the meeting on expectations a deal would be secured, while the euro rose 0.2 percent.