During the two-day EU summit on June 28 and 29, all eyes will be breathlessly riveted on German Chancellor Angela Merkel—with one question on all lips: will she blink? Because nothing less than the future of the Eurozone and the euro is at stake. And by extension, the world economy. Only she can save it. And she’d have only 48 hours!
Euro
The Extortion Racket Shifts To Italy
by Wolf Richter • • 2 Comments
One thing Greek politicians have taught other European leaders: fear mongering for the purpose of extortion is the way to go. It might not work, and it might be counterproductive, and it might destroy confidence in the economy and give investors goose bumps and blow up markets, and it might cause spooked consumers to hold back on purchases and worried businesses to freeze hiring plans, thus exacerbating the situation, but it’s nevertheless the way to go.
“You Can Lose Freedom Only Once”
by Wolf Richter • • 6 Comments
Poor Angela Merkel. The beleaguered German Chancellor just can’t catch a break. She has already committed hundreds of billions of taxpayer euros to bailing out collapsing countries. In return, she wants them to live within their means and restructure their economies so that the bailouts wouldn’t have to continue ad inifinitum. For that, she joins the Axis of Evil. And then the Swiss Minister of Defense speaks up.
The G-20 Farce to Save The Eurozone From Collapse
by Wolf Richter • • Comments Off on The G-20 Farce to Save The Eurozone From Collapse
The G-20 summit last November in Cannes, France, was all about bailing out Greece, and it turned into a fiasco. Now at the G-20 summit in Los Cabos, Mexico, tiny Greece is still front and center, but the summit has been escalated: it would be about bailing out the entire Eurozone and its currency. And President Obama made his agenda clear: he wanted everybody else to do “what’s necessary to stabilize the world financial system.”
Greece in Panic … um, Wait!
by Wolf Richter • • 2 Comments
“If Greece doesn’t get its next loan installment, the Eurozone will collapse the following day,” scowled Alexis Tsipras, leader of the left-wing SYRIZA. By threatening the entire Eurozone with its demise, if he won the election, he ratcheted up the bailout extortion racket a few more notches. So the run on the banks turned into panic, and Eurozone heads of state, who’re already on edge, threatened in return. Everything is coming to a head.
Italy Trembling on the Brink
by Wolf Richter • • 2 Comments
“I believe, no,” is how Italian Prime Minister Mario Monti answered the question if Italy would seek a bailout—lacking the bravado and vehemence with which Spanish Prime Minister Mariano Rajoy had claimed for the longest time that Spain wouldn’t need one. Until it needed one. The question was hot. It followed the kerfuffle that ensued when Austrian Finance Minister had let it slip that Italy might also need “support.” But Italy is too big to get bailed out.
Manna for Bankrupt Cyprus
by Wolf Richter • • Comments Off on Manna for Bankrupt Cyprus
In Greece’s chaotic wake bobs the listing Republic of Cyprus, soon to be the fifth Eurozone country, out of seventeen, to get a bailout. By June 30. Only last year’s €2.5 billion loan from Russia has kept it afloat. It’s economy is shrinking, unemployment is at a record, and real estate is collapsing after a phenomenal bubble and a nationwide title-deed scandal that has taken down the banks. But Cyprus has something—and it’s huge—that no other troubled Eurozone country has.
Greece’s Scams, Extortion, and “Suicidal” Possibility
by Wolf Richter • • Comments Off on Greece’s Scams, Extortion, and “Suicidal” Possibility
On June 17, when Greeks try again to choose a government, they’ll decide their country’s fate—or not. One thing is for sure, whichever parties are able to form a coalition government, they will push for more bailout billions, but this time, forget the conditions, the structural reforms, the austerity. Just give us the money. And however much we want. They’d watched Spanish Prime Minister Mariano Rajoy proclaim victory.
“The Euro Is Like a Knife in the Hands of a Child”
by Wolf Richter • • Comments Off on “The Euro Is Like a Knife in the Hands of a Child”
While France is preoccupied with the legislative elections next weekend, Germany and Austria plunge into public soul searching about the euro, its meaning, its relevancy, the sheer and endlessly growing expense of maintaining it. To which are now added the $125 billion for bailing out Spain, the first in a series. Then there’s Italy. Like so many things that appear useful and sensible, the euro has become dangerous.
A Central Banker Utters The Truth
by Wolf Richter • • Comments Off on A Central Banker Utters The Truth
On July 1, Cyprus, a tiny country on a divided island, will rotate into the Presidency of the Council of the mighty EU—one of those bitter European ironies because Cyprus will have to be bailed out, according to its Central Bank governor. Reality is now even staining the Teflon economy of Germany with a daily litany of suddenly awful data points. But a central banker pointed at an uplifting story of austerity and growth at the edge of Eurozone mayhem.