It Happens Every Spring - flickr

“This is gettin monotonous. Me and the kid here is playin catch while you guys is just fannin the air” – It Happens Every Spring

Pretty good way to start off this diary on the goings on in the Eurozone.  In case you haven’t seen the movie, it’s about a college chemistry professor who accidentally come up with a formula that causes baseballs to hop over wood and uses it to help the home teem.   Rather like the politicians trying to get the dept problem to avoid the banks. Which now focuses on Spain as well.  Here is the current situation from The Guardian.

1.50pm: De Guindos is still going:

He believes the cost to Spain’s bank restructuring fund of helping out banks that cannot come up with the new provisions will be less than €15bn euros. Loans wil be for up to five years, but can be converted into shares (i.e. part nationalisation) if the banks fail to pay them back.

1.39pm: And more from Giles:

De Guindos has said that two separate valuations of the global real estate loan portfolio of Spanish banks will be produced by independent valuers.

Journalists at the press conference want to know if this is a vote of no confidence in the Bank of Spain and its valuations. Ministers do not want to answer the question and are insisting that all they want is maximum transparency.

Live blog: newsflash

Read the rest of this entry →

The Original Amateur Hour - Flickr

“Round and round and round shes goes. Where she stops, nobody knows.” I thought this phrase from a show of long ago, Ted Mack’s Original Amateur Hour quite appropriate actually. Since the the ball has been passed back to Evangelos Venizelos of PASOK to once again try and form a Government in Greece. Here is the link to Athens News current live blog.

4.01pm Evangelos Venizelos will meet Democratic Left (DI.MAR) leader Fotis Kouvelis at 18.00 in the framework of his efforts to form a government, after receiving the third exploratory mandate from President Karolos Papoulias. According to Pasok, Venizelos will then meet with New Democracy (ND) leader Antonis Samaras on Friday at 10am.

3.59pm In an announcement, the Democratic Left have stated that the party remains adamant in its position on the realistic direction of the gradual disengagement from the memorandum via a strong renegotiation with our lenders as well as its stable focus on the country’s remaining in the eurozone. In the announcement the party sternly criticises the Syriza leadership, charging that “within the framework of the exploratory mandate, it did not take advantage of the opportunity to form a government” and that “with its handlings, it could send the country to new ballots, possible resulting in the rejuvenation of bipartisanism and conservatism”. ”Syriza members statements on the Greek economy, the obsession for the denouncement of the loan agreement that will mean bankruptcy and a rift with the eurozone, make a political agreement difficult. The maximalistic positions cancel out any possible solution. Syriza is exercising politics with the new campaign period in mind,” the announcement said.

3.50pm Have a look at what the Greek newspapers are saying about the fourth day of the coalition government dance in George Gilson’s Press Watch

3.46pm Syriza party sources have denied reports broadcast in Paris, that Alexis Tsipras and Left Front candidate in the recent French Presidential elections Jean-Luc Melenchon, would give a joint press conference in the French capital. The sources said that Tsipras is not planning any trip before the completion of the exploratory mandates process for the formation of a government in Greece.

Greek Statue - Flickr Creative Commons

Though flying under the radar here, there are some important developments in the Greek Elections that could change the economic situation in Europe and here as well. The Guardian has a live blog going on the situation here.

And Athens News has one here. This in my estimation is more important that the French election results, but maybe only just.

Here is the latest break down from the Guardian.

2.35pm: Shares on the Athens stock markets are being routed, after Alexis Tsipras (who holds the mandate to form the next Greek government) insisted that Greece should not abide by the terms of its bailout (see 1.27pm onwards).

The main stock index in Athens has fallen by 5%, with the banking index down by over 10%.

Analysts at IHS Global Insight warned this afternoon that the prospects of a strong, stable Greek government look “more and more distant”, adding:

Without political and social support for austerity and reforms, the already challenging adjustment programme agreed with the “troika” looks destined for failure.

Although several polls show that a majority of Greeks wish to stay in the Eurozone, the surge in votes for parties decidedly against the reform programme suggests that a sizeable portion of the Greek electorate is not prepared to do what needs to be done in order to remain in the common currency area.

But can you blame them, in the face of a five-year recession, unemployment rising, and an ongoing slump in its manufacturing and industrial sectors?

2.30pm: Here’s a breakdown of Alexis Tsipras’s conditions for forming a new government with either of the two ‘mainstream’ Greek parties (via Ekathimerini

1) The immediate cancellation of all impending measures that will impoverish Greeks further, such as cuts to pensions and salaries.

2) The immediate cancellation of all impending measures that undermine fundamental workers’ rights, such as the abolition of collective labor agreements.

3) The immediate abolition of a law granting MPs immunity from prosecution, reform of the electoral law and a general overhaul of the political system. According to Keep Talking Greece, that would include abolishing the 50-seat bonus for the party which wins the most seats.

4) An investigation into Greek banks, and the immediate publication of the audit performed on the Greek banking sector by BlackRock.

5) The setting up of an international auditing committee to investigate the causes of Greece’s public deficit, with a moratorium on all debt servicing until the findings of the audit are published.

That adds up to a resounding rejection of Greece’s current financial programme.

And here from Athens News.

4.55pm A lot has been said today about the statements made by Syriza member Dimitris Stratoulis, concerning the Greek banks and possible state control, in an interview given to Vima FM radio station.  The highlights are as follows:

- Technically and financially, if you’re saying we are leaving the memorandum, how will you handle the banking issue? If we leave the memorandum, they’ll just be empty tresure chests.

- They won’t be empty treasure chests. Greek banks already have 165 billion euros worth of deposits by the Greek people.

- That’s our money, not bank money though.

- We shall put in motion an immediate public audit of the banks, guarantee citizen deposits and then use that money for growth and a productive re-structuring of our country.

- Does that mean deposits will be freezed?

- We said we will provide guarantees, no deposits will be frozen.

- And how will that money be used for growth, when it belongs to Greek citizens?

- How would you want it used? Up until now, it has been used, to fund the profits of bank shareholders and bankers. Should it not be used to support market liquidity, to offer loans to small and medium sized business ventures, to offer loans to the public for houses, to offer consumer loans? It is all a matter of political direction.

Part of his positions were echoed by Alexis Tsipras, when he spoke from Parliament earlier, although neither he nor Stratoulis have made the details of their banking plan completely clear.