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Head of right-leaning Institute of Economic Affairs suggests tax credit reform can be done in way that encourages full-time workDavid Cameron’s plans to focus £12bn of welfare cuts on slashing tax credits and other working-age benefits look set to be “extremely unfair” on the families who will lose money, the right-leaning Institute of Economic Affairs thinktank has said.The prime minister argued on Monday in a speech delivered in Runcorn, Cheshire, that the UK should pay out less in tax credits – which top up the wages of low-earners – suggesting companies should offer workers higher salaries instead. Continue reading...

VAT hikes and pension changes were once non-negotiable for Athens – now they look like they are on the tableLike a husband forgiven for countless infidelities, Greek leader Alexis Tsipras is back in Brussels with a wink and a smile and, yes, another kiss and make-up proposal. Only this time, it looks like the marriage is saved.Tsipras has for the first time in several months taken the time to consider the concerns of his partners and rather than simply demanding solidarity, he has put together a plan to patch things up.Related: Tax matters - Greece bailout deal hinges on collection rates Continue reading...

What is Matthew d’Ancona on about (George Osborne’s coup: converting Labour to fiscal conservatism, 21 June)? I borrow a fiver so I can travel to the next village for a day’s work picking fruit. At the end of the day I pay back the fiver, and buy you a pint, and we’re all better off than if I’d stayed at home. Borrow, invest, repay, profit.Even if the bus broke down on the way home and I had to pay for a share of a taxi, we’re all still better off. The problem wasn’t the borrowing, it was the corrupt bus company shaving costs on maintenance. Don’t confuse two separate issues. If I hadn’t borrowed the money, I wouldn’t have done the work, and couldn’t have dealt with the crisis caused by private sector irresponsibility. Continue reading...

European Council president Donald Tusk says leaders must do their bit to prevent Greek crisis escalating, as rival protesters meet in Athens

With seemingly never-ending panic over ‘last-ditch’ talks, many have deadline fatigue and think long-term solutions are out of reachAs the “last-chance” talks rolled on towards another “last-ditch” summit possibly at the end of this week, weary Greeks have deadline fatigue.“Unfortunately, we’ve become hardened and accustomed to all this, including the never-ending talks,” said Christos Griogoriades, a physics and IT teacher in Greece’s northern second city of Thessaloniki.This crisis has gone on for years and, for my generation, it feels like it’s going to go on foreverRelated: Creditors offer Greece six-month bailout reprieve as Tsipras weighs response Continue reading...

Agreement with creditors relies not just on reformed tax rates but collection rates with Athens losing 6% more of GDP to evasion than OECD peersAt the heart of the proposals submitted to Brussels by the Greek government on Monday – and central to the disagreements remaining between Athens and its creditors – is the issue of tax.According to reports circulating in Athens, the government offer to negotiators includes corporation tax increases on companies with profits over €500,000 (£359,000) and additional income tax for individuals with annual earnings of more than €30,000. Continue reading...

The plight of the Greek economy has been devastating, but it has also led to a flowering of civil society. Here two young activists look at five new initiatives

Guardian readers who took part in Saturday’s march against austerity have been sharing their images from the day. Here are some highlights, from crabby Cameron to sweary placardsTens of thousands marched through London and Glasgow on Saturday to protest the Conservative’s government’s ongoing commitment to austerity. We received hundreds of images and stories from the day via GuardianWitness.

Eurogroup agrees to develop first “detailed and credible” plan from Athens in five months of wrangling to help avert bankruptcyRelated: Tsipras of Athens – a gripping drama entering its final act | Larry ElliottGreece’s eurozone creditors have raised the prospect of an agreement to stave off imminent bankruptcy after agreeing to develop proposals from Athens aimed at unlocking vital bailout funds.Membership Event: Guardian Newsroom: Should Greece leave the Euro?Related: Greek crisis: last-ditch bid to avert default - live updates Continue reading...

Businesses are struggling to tackle the widening disparity between staffing needs and qualified applicants, some are coming up with creative solutionsLast year, Traci Trapani needed employees for her sheet metal fabrication company. None of the applicants, however, had experience in the industry. So Trapani did something unorthodox: she hired a woman who had been working in a fast food restaurant and invested in teaching her the sheet metal business.

Prime minister to attack ‘merry-go-round’ whereby the low-paid have money taken in tax and then given back in tax creditsDavid Cameron is to deliver his strongest hint yet that he intends to launch an assault on tax credits as he pledges to end the “merry-go-round” of welfare payments that means low wages are topped up by the state.The prime minister will make the comments in a speech in Runcorn on Monday morning just weeks before George Osborne, the chancellor, sets out £12bn of welfare cuts, seeking to justify them in terms of both reducing the deficit and the need for further changes to incentivise work.Related: Andy Burnham rejects Osborne's call for Labour support on £12bn welfare cutsRelated: Andy Burnham rejects Osborne's call for Labour support on £12bn welfare cuts Continue reading...

Deal may also include up to €18bn in rescue funds, and later debt relief, but EU officials stress Greek prime minister must make concessionsGreece’s international creditors are aiming to strike a deal to stop Athens defaulting on its debt and possibly tumbling out of the euro by extending its bailout by six months and supplying up to €18bn (£12.9bn) in rescue funds.

With the latest cuts likely to hit the poorest and most vulnerable the hardest, this could be the issue that makes or breaks the Labour party for the next five yearsAll through the austerity years, the unravelling of the Greek economy – now seemingly heading for another interim deal – has served as a convenient backdrop for George Osborne’s own drive to hack back the state. The British banks are not about to fail, nor are British pensioners about to suffer the plight of millions of their Greek counterparts, but some pretty severe belt-tightening is coming here too. On Saturday, tens of thousands of demonstrators marched through British cities, including a quarter of a million in London and Glasgow, in a show of support for the other side of the argument: that austerity should be ended now. Meanwhile, Labour has been fumbling for a response for five long years. The construction of a coherent, persuasive narrative on welfare reform, and what part it should play in deficit reduction, must be at the top of the in-tray for the party’s next leader.The Conservative attack on Labour’s opposition to the coalition government’s cuts played a big part in reinforcing their claim that the longest and deepest recession in modern times was all down to excessive state spending. And barely had the anti-austerity protesters got home on Saturday than Mr Osborne and the work and pensions secretary, Iain Duncan Smith, were declaring their commitment to go full throttle with more austerity measures. In a joint article in the Sunday Times, they declared that they had reached agreement on the £12bn cuts pledged before the election, despite speculation that Mr Osborne was under pressure from other senior Tories, including Mr Duncan Smith, to back off for fear of the reputational harm that more cuts might bring. Continue reading...

Pensions are area that Greece’s negotiators will be under greatest domestic pressure not to concede, but agreement must be reached this weekMaria Nikolaidou had her 40th birthday on Friday. But, she said: “I am now too old to get a job.”

Re your front-page article (Greece: can’t pay, won’t pay, 18 June), it is not so much that Greece cannot pay and will not pay, because the difference in the amount that Greece is prepared to concede and the amount that the troika are prepared to contemplate is not huge in the context of the size of even the smaller economies in Europe. The problem lies in the terms of “reform” that are being demanded by the troika. These demands are not evidence-based in economics. For example, there is an emerging divergence between the public pronouncements by economists at the IMF about the desirable policy for growth and the declared position of the negotiators acting on behalf of the board of directors of that organisation.This suggests that the shareholders – European governments hold large blocks of shares – are less concerned about requiring evidence-based reforms than in making ideological demands designed to effect a regime change in Greece. This is a dangerous game which could derail the democratic project of the EU. Modern democracy in Europe is not deep-rooted. Inter-ethnic violence and governance through repression have been the norm for far too long until the attempted creation of a democratic Europe under the umbrella of the EU.

The scene was set for Greece to default on its debts and perhaps tumble out of the euro. But, like all the best plays, there is more than one possible endingIn the film Shakespeare in Love, one disaster after another befalls the impresario Philip Henslowe. The London theatres are closed by the plague. The voice of the male actor playing Juliet cracks just as he is about to go on stage. Henslowe never despairs, and he insists all will turn out well. Asked how, he has a stock answer: “I don’t know, it’s a mystery.”Over the last week, those who have said a solution will be found to the Greek crisis have tended to fall back on the Henslowe explanation. Talks have broken down. Summits have come and gone. Insults have flown in all directions. The deadline for Greece to make a 30 June payment to the International Monetary Fund has edged ever closer. There has been nothing but bad news. Yet, through it all, the relative calm in the financial markets has reflected a belief that, despite everything, the drama Tsipras of Athens will have a happy ending.Related: Greece crisis: creditors aim to strike deal to include six-month rescue extensionMembership Event: Guardian Newsroom: Should Greece leave the Euro?Related: Why David Cameron is an anxious spectator of the Greek drama | Andrew Rawnsley Continue reading...

Greek prime minister, Alexis Tsipras, is thought to have offered concessions on VAT and pensions in return for some form of eventual debt reliefThe Greek prime minister, Alexis Tsipras, and European leaders were attempting to stitch together a last-minute Greek bailout deal on Sunday following a frantic round of phone calls to discuss an outline agreement.The high-level diplomacy comes as eurozone finance ministers and their government leaders prepare for a key summit in Brussels on Monday that could determine whether or not Greece remains a member of the group.Membership Event: Guardian Newsroom: Should Greece leave the Euro? Continue reading...

With the humbling of the west and the converging interests of China and Russia, could the New Silk Road lead to a vast free-trade area?The Chinese are the most historically minded of people. In his conquest of power, Mao Zedong used military tactics derived from Sun Tzu, who lived around 500 BC; Confucianism, dating from around the same time, remains at the heart of China’s social thinking, despite Mao’s ruthless attempts to suppress it.So when president Xi Jinping launched his “New Silk Road” initiative in 2013, no one should have been surprised by the historical reference. “More than two millennia ago,” explains China’s National Development and Reform Commission, “the diligent and courageous people of Eurasia explored and opened up several routes of trade and cultural exchanges that linked the major civilisations of Asia, Europe and Africa, collectively called the Silk Road by later generations.” In China, old history is often called to aid new doctrine.Economic and political developments have created an opportunity for Eurasia to emerge from its historical slumbers Continue reading...

Labour leadership candidate says he will not support ‘brutal plans’ and that chancellor should expect a fight over any cuts to disability benefits or tax creditsGeorge Osborne’s call for Labour to support his plans for £12bn of welfare cuts has been rejected by leadership frontrunner Andy Burnham, who warned the chancellor to expect a fight over any reductions to disability benefits or tax credits.Burnham, the shadow health secretary, said it was unacceptable that Osborne had refused to spell out before the general election where he was planning to make the cuts, arguing this approach was “pretty disgraceful” and was “frightening people”.Related: Anti-austerity protest passes off peacefully with just five arrests Continue reading...

Fears of a ‘riot plot’ proved unfounded as up to 150,000 protesters marched through central London, with other demos in Glasgow, Bristol and LiverpoolBritain’s largest anti-austerity demonstration in four years has passed off with only five arrests made.Between 70,000 and 150,000 people marched through central London on Saturday to protest against government plans for deep budget cuts before a rally in Parliament Square.Related: Osborne to proceed with £12bn welfare cuts despite anti-austerity protests Continue reading...

Helena Smith has watched as the crisis has engulfed Greece. Here she describes a week of mounting tension in Athens as fateful and painful choices loomFive years is a long time to be in crisis. It’s freefall by a thousand cuts; loss in myriad ways, hard choices that never get easier.Related: Greek prime minister prepares last-ditch offer to avoid default on debtsMembership Event: Guardian Newsroom: Should Greece leave the Euro? Continue reading...

Flurry of behind-the-scenes negotiations before European Union summit on Monday that could decide Greece’s fateThe race to save Greece from economic collapse has intensified as the country’s beleaguered leader conducted a flurry of behind-the-scenes negotiations before an EU summit on Monday that is expected to decide the country’s fate.Alexis Tsipras, the prime minister, met senior officials on Saturday in an attempt to devise a package of reforms that would secure emergency funds and avoid the nation defaulting on its massive debts. It will be the third such proposal that Athens has made to its creditors in as many weeks.Membership Event: Guardian Newsroom: Should Greece leave the Euro? Continue reading...

A ‘misconceived failure’ from the start… or a true ‘public good’: our experts put the single currency in the dockGreece may yet escape the humiliation of defaulting on its debts and being forced out of the single currency. Yet the terrible suffering of its people over the past five years shows that the single currency is a fundamentally misconceived project. It is extraordinary that an economic catastrophe on the scale of the Great Depression has been visited on a country in 21st-century Europe, not because of the neglect of the policymaking elite but under their direct supervision – and indeed under the guise of a “bailout”. Continue reading...

Time is running out as the country’s banks face a debilitating run on their deposits as nervous savers take out their cash, but there’s still hope for a dealWhy are eurozone leaders holding yet another make-or-break Greek summit?Despite a series of fraught meetings, Greece is still on the brink of default, and eurozone leaders, preceded by their finance ministers, are due to meet tomorrow in another attempt to strike a deal. Continue reading...

Placard-waving protesters from across the country join to make their frustrations known in largest protest against cuts since the Tory election victory

Between 70,000 and 150,000 estimated to have marched in central London, with demonstrations in Glasgow, Liverpool and BristolForty-four days after David Cameron won an unexpected majority in the general election, the opposition parties are still picking themselves up off the floor. On Britain’s streets, however, tens of thousands of people took up their placards and marched in London, Glasgow and elsewhere in the first major protest against the government’s plans for five more years of austerity.Estimates of the size of the rally in central London on Saturday varied between 70,000 and more than 150,000. Several thousand more gathered in Glasgow’s George Square and smaller demonstrations were reported in other cities, including Liverpool and Bristol.Related: Anti-austerity protest in London – in picturesRelated: Are you campaigning against austerity?Related: 'People have finally had enough': middle England marches against austerity Continue reading...

Protesters took to the streets of London to march against the government’s spending cuts and austerity measures Continue reading...

Three years ago the country faced an Athens-style bailout. Now the shadow of collapse has lifted - but the young and jobless are still strugglingDaniel Roman is feeling upbeat. Six months ago, the 38-year-old sommelier opened a small wine shop in the Mercado de la Cebada, a covered market in Madrid’s trendy La Latina neighbourhood. “I’m confident,” he says, as he serves two elderly customers from the counter. “Opening here was the natural next step for me. I’ve always wanted to build something of my own.”The statistics would indicate he has every reason to feel cheerful. Spain’s economy appears to be emerging at full throttle from one of the longest and deepest recessions it has ever suffered. An IMF report said growth by the end of this year will be a startling 3.1%, leading to job creation, and, in theory at least, a better standard of living for Spaniards who have suffered crippling levels of unemployment and decline over the last seven years.Looking back, 2006 and 2007 seem like a mirage in the desert Continue reading...

Minister of state says Athens will improve its current proposals to win a fresh bailout and the end deadlock before the end of June deadlineGreece is to improve its offer to its international creditors in a new attempt to find agreement before a deadline at the end of June which could force the country into default and out of the eurozone.Membership Event: Guardian Newsroom: Should Greece leave the Euro? Continue reading...

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The president of the European Council, Donald Tusk, speaks out in a new video and urges the Greek authorities to accept what he believes is a 'good offer' from Europe or risk defaulting on their loans. Greece has been thrown a lifeline in the form of extra European Central Bank funding, but the money is only expected to last until the emergency summit scheduled for Monday Continue reading...

In his comments on the debate about the plans for legislation to enforce budget surpluses, Philip Booth (Letters, 16 June) takes the opportunity to return to the debate about the crucial 1981 budget. He reiterates the common claim that the 364 economists who criticised the budget were wrong because growth returned to the economy soon after. What he doesn’t say is that the reason growth was resumed was because of a previous easing of monetary policy, which helped correct the disastrous appreciation of sterling which was the main cause of the early 1980s recession. This easing of monetary policy was quite at odds with the government’s medium term financial strategy, and showed that claims that “the lady’s not for turning” were empty rhetoric.This whole episode was one of the most disastrous in postwar economic policy. As Mrs Thatcher’s key economic adviser, John Hoskyns, later wrote, the government had “accidentally engineered” a major recession and “done the economy a great deal of damage by mistake”. George Osborne’s policies seem likely to repeat this process.

Kiev says it will stop servicing its $23bn debt unless progress is made in restructuring talks with foreign bondholders soonUkraine has offered an updated debt restructuring proposal to creditors, its finance minister says, warning that Kiev would halt debt payments if bondholders did not make use of this last chance to clinch a deal in coming talks.Ukraine is negotiating with foreign bondholders to restructure $23bn (£14.5bn) of debt, but talks have soured over a disagreement on the necessity of a writedown on the principal of the bonds.Related: 'A true friend': Ukraine president asks Tony Blair to take on advisory role Continue reading...

It’s close to crunch time for Greece and its creditors. At issue is how to close €2bn gap in government budget after Athens refused to make further spending cutsThe standoff between the EU commission and Greece must be resolved by the end of the month. Either Brussels releases the last €7.2bn (£5.14bn) of bailout cash due to Athens under its existing rescue deal or Greece goes bust. Here are the possible scenarios to how this may play out:Membership Event: Guardian Newsroom: Should Greece leave the Euro? Continue reading...

European Central Bank has agreed to provide more support to keep Greek banks operating until crucial eurozone meetings on Monday

Wall Street firm appointed after George Osborne’s announcement of plan to sell shares in bailed-out Royal Bank of Scotland at a lossGoldman Sachs is to play a key role in selling off the taxpayer stakes in Royal Bank of Scotland and Lloyds Banking Group.The Wall Street bank is replacing US rival JP Morgan in advising UK Financial Investments, the body which looks after the taxpayer stakes in the bailed-out banks.Related: The Guardian view on the RBS sell-off: a bad deal all round | Editorial Continue reading...

The EU authorities are trampling over the will of the people as they push for a solution to Greece’s economic crisis. It seems democracy itself is on trialI am not a natural Syriza voter, but the words and deeds of the EU towards Greece are enough to provoke me to sympathise with the Greek people and their government over austerity.Greece has lost a quarter of its national income and output since 2007. That means, on average, a Greek citizen who was earning €10,000 (£7,000) in 2007 is today, after wage cuts, on €7,500 (£5,300). This is a crude average, so in practice many have suffered larger cuts as they have lost their jobs, or were on higher public sector pay, which has been cut more.If an economic policy creates mass unemployment and crushes living standards it should be changedRelated: Greek crisis: ECB provides more emergency help as Tusk warns "no more games" - liveMembership Event: Guardian Newsroom: Should Greece leave the Euro? Continue reading...

As the eurozone crisis teeters towards a climax, some Greeks still hope for a radical solution, others for a deal of any kind, but all are fearful and weary“It’s all right, they can go ahead and do it now,” said Vassili Michaelides, a systems analyst, turning away from the National Bank cashpoint on Syntagma Square in central Athens with a clutch of €20 notes.“They haven’t gone down on their knees and signed the first piece of paper they were given, like all the others. But it’s time now to bring back a deal. Because honestly, nobody here can take this for much longer.” Continue reading...

Alexis Tsipras in Russia dismisses criticism that he should be in Brussels solving debt standoff: ‘We are ready to go to new seas to reach new safe ports’Alexis Tsipras, the Greek prime minister, has made a broad overture to Russia as he seeks a way out of his country’s debt and currency impasse, telling Vladimir Putin that Greece wants new partners to help it out of the crisis.In a speech delivered in front of Putin in Russia, Tsipras said Moscow was one of Greece’s most important partners, and dismissed critics who wondered why he was in St Petersburg and not in Brussels trying to secure an urgent deal with European creditors.Related: Greek crisis: ECB provides more emergency help to avert bank run - reportsMembership Event: Guardian Newsroom: Should Greece leave the Euro? Continue reading...

He is the rising star of the battle to be the Democratic nominee for president. But who is the real Bernie Sanders? His close friends and family shed new light on what is motivating the 73-year-old senator, while never-before-seen documents from his first foray into politics – as a Vermont mayor – reveal activist roots that were 30 years ahead of their timeThe diplomatic overture was dispatched to Hu Yaobang, chairman of the Chinese Communist party, on 29 October 1981. A near-identical letter was sent to the Kremlin, for the attention of Leonid Brezhnev, general secretary of the Communist party of the Soviet Union.“Like an unconscious and uncontrollable force, our planet appears to be drifting toward self-destruction,” the newly installed socialist leader of somewhere called Burlington wrote. He urged them “in the strongest possible way” to disarm militarily and begin immediate negotiations with other world leaders.

Fears that Greek banks and ATMs may shut prompt warnings from travel advisersHolidaymakers heading to Greece over the next few days are being advised to take plenty of cash with them amid fears the country’s cash machines could be shut down if a resolution to the crisis is not found.Related: Greek crisis: ECB meeting to decide on €3.5bn emergency fundingRelated: Greek crisis: ECB deciding on new lifeline for Greece - live updates Continue reading...

End Austerity Now, a demonstration organised by The People’s Assembly, is taking place in London this weekend. Taking part? Share your photos and stories

The chancellor, George Osborne, urges Greece on Friday to strike a deal with its international creditors in loans-for-reforms talks, adding that the UK is hoping for the best but preparing for the worst. Speaking as he arrives for a meeting of the European Union's finance ministers in Luxembourg on Friday, Osborne says Britain has taken measures to increase economic security in case Greece exits the eurozone Continue reading...

Thousands of Greeks gather in Athens in support of EU membership as eurozone ministers fail to reach a deal and announce an emergency meeting. The demonstration was held one day after a rival protest by supporters of the ruling Syriza party, who are urging the government to reject creditor demands for pension cuts and VAT hikes in exchange for vital financial support. Default and capital flight could lead to Greece's exit from the eurozone Continue reading...

George Osborne still expected to press ahead with steep cuts to welfare budgets and WhitehallGeorge Osborne is on track to cut the annual budget deficit by more than previously forecast after a block on spending and a jump in tax receipts in May.The Office for National Statistics said government borrowing last month dropped to £10.1bn, the lowest since 2007, from £12.3bn in May last year – an 18% fall. The total stock of debt, excluding public sector banks, was £1.5tn or 80.8% of GDP, an increase of £83.2bn compared with May 2014.

Financial exposure to the risk of Greece defaulting on its €320bn debt affects eurozone member states and foreign banks. How will it all play out?Greek crisis - live updatesGreece says it will run out of money at the end of the month if a deal with its creditors the European commission, the European Central Bank and the International Monetary Fund cannot be reached.Related: Greek crisis: Emergency meetings as bank fears grow - live updatesRelated: Eurozone talks end without deal as Greek proposals rejectedBarclays: Official exposure to Greece in EMU by country and type pic.twitter.com/5QKkrsWr77 Continue reading...

Emergency summit of leaders called for Monday as fears rise for Greek financial system if a deal cannot be reachedGreece is facing a full-blown banking crisis after a meeting of eurozone finance ministers broke down in acrimony and recrimination on Thursday evening, bringing the prospect of Greek exit from the eurozone a step nearer.Related: Eurozone talks end without deal as Greek proposals rejected Continue reading...