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by Jennifer Rankin on (#EMTC)
Negotiations set to re-open argument over whether the Greek economy can recover while weighed down with debts totalling €320bnThe eurozone is ready to start formal talks with Athens over an €86bn (£60bn) bailout, paving the way for a month of wrangling over the bitterly disputed question of easing Greece’s debt burden.
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| Updated | 2025-04-26 18:45 |
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by Patrick Kingsley in Crete and Josie Le Blond in Be on (#EMQ4)
Relations between Greek and German politicians may be tense amid the economic crisis, but empathy is easy to find on the streets of both countries
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by Larry Elliott on (#EMKY)
Martin Wheatley’s resignation is another victory for the increasingly bullish banks – George Osborne has capitulated againIt’s job done as far as Britain’s banks are concerned. The departure of Martin Wheatley as the head of the City’s watchdog marks a triumph for the forex fiddlers and the Libor manipulators, but a defeat for the rest of us. The clock has been turned back eight years to the bad old days when the last Labour government ensured that what the banks demanded, the banks got.George Osborne was, of course, full of praise for Wheatley as his resignation was announced. The outgoing head of the Financial Conduct Authority was “brilliantâ€. He was “passionate†about defending the interests of consumers. A bit too passionate, it seems. Continue reading...
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by Editorial on (#EMBQ)
The creation of a single European currency was a brave experiment with the future. It will take another brave experiment to rescue it“Great powers have great currencies†goes the aphorism of Robert Mundell, the Nobel prize-winning political economist. Sure enough, one of the easiest guides to power is to check which currency is most widely accepted around the world. When Britannia ruled the waves, pound sterling ruled the foreign exchanges, while the long “American century†has been papered in greenbacks. Millennia before the iron age of Jean-Claude Juncker and Martin Schulz, Athens enjoyed a golden age – and so did the silver drachma.At its birth in 2000, the euro was garlanded with predictions by Mr Mundell and other eminent economists that it would soon challenge the dollar for global dominance. One of Bill Clinton’s top economic advisers, Jeffrey Frankel, went so far as to co-author a forecast that the euro would overtake the dollar as the world’s top currency … by as early as 2015. This is about more than a league table. As home of the dollar, the US enjoys what has been called an “exorbitant privilegeâ€. Washington can borrow, even at times of crisis, far more easily and cheaply than its competitors. A great currency makes it easier to finance the role of a great power. It also confirms that status. If money talks, it is scarcely more eloquent than when Saddam Hussein redenominated Iraq’s oil exports in euros, rather than dollars (“the currency of the enemyâ€), or Beijing picked London as a hub for trading the renminbi. When Jacques Delors, the former European commission head, claimed at its inception, “The little euro will become bigâ€, no one quibbled. How could it not? Europe was expanding east and Washington’s “unipolar moment†was drawing to a close. The idea of a monetary union without political union was novel, but it fitted contemporary scepticism of the nation state as an “imagined community†– not to mention the belief of technocrats that budgetary rules could trump political norms. Continue reading...
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by Kate Connolly in Berlin on (#EM5S)
Politicians in the Bundestag vote to start negotiations by 439 votes to 119, with 40 abstentions
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by Steven Greenhouse on (#EKYY)
Experts say the Republican presidential candidate’s assertions that changes to overtime pay would result in fewer jobs and lower pay show he is misinformedJeb Bush has created a flap with another statement about American workers. In an appearance in Council Bluffs, Iowa, on Tuesday, he said Barack Obama’s proposal to expand overtime pay to millions more managers and white-collar workers would result in “less overtime pay†and “less wages earnedâ€.Numerous economists attacked Bush’s statement, calling him woefully misinformed. And several studies on the rule contradict Bush’s assertion that the overtime rules would “lessen the number of people workingâ€.Related: Fact-checking Jeb Bush: If Americans work more hours, economy will grow Continue reading...
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by Phillip Inman on (#EKXY)
The self-appointed guardian of the EU’s financial rulebook says EU rules forbid a write-off. But there are many ways to get round the legal restrictionsA vote in the Greek parliament means little to Germany’s finance minister, Wolfgang Schäuble. The self-appointed guardian of the EU’s financial rulebook says Athens can vote as many times as it likes in favour of a deal that promises, even in the vaguest terms, to write off some of its colossal debts, but that doesn’t mean the rules allow it.In fact, as Schäuble delights in pointing out, any attempt at striking out Greek debt is, according to his advice, illegal. Yet Schäuble knows Greece’s debts are unsustainable unless some of them are written off – he has said as much on several occasions. So faced with its internal contradictions, he posits that the deal must fail and the poorly led Greeks exit the euro.Optimists argue that a debt write-off can take many forms, getting round Schäuble’s legal restrictions Continue reading...
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by Emma Graham-Harrison in Athens on (#EKT8)
Time banks, farmer-to-buyer sales groups and alternative currencies springing up but expansion has not been steady or easyAs money has become tighter in Greece, an alternative “solidarity economy†has sprung up providing everything from food and medical care to hairdressing and language classes to thousands – without a euro changing hands.The Athens Time Bank, for example, allows members to collect credits by offering an hour of their time to someone who needs their services. The bank boasts doctors, dentists, electricians, yoga teachers and plumbers among its ranks, but the most popular service on offer is psychotherapy – highlighting how years of austerity have eaten away at more than just savings and living standards.Related: Euros discarded as impoverished Greeks resort to bartering Continue reading...
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by Jennifer Rankin in Brussels on (#EKGK)
Christine Lagarde’s comments echoed earlier concerns that proposals will fail unless measures go far beyond what the eurozone has offered so far
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by Shane Hickey on (#EKD8)
Sterling hit high of more than seven years after Bank of England governor Mark Carney indicated that period of 0.5% borrowing costs will end within monthsThe pound has hit a seven-and-a-half year high against the euro after Mark Carney signalled that the first rise in interest rates since the global financial crash could take place around the turn of the year.
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by Larry Elliott Economics editor on (#EHRN)
Mark Carney says first increase since height of financial crisis is becoming increasingly necessary as economic growth strengthensBritain has been put on alert to expect its first interest rate rise since the global financial crash at around the turn of the year as the governor of the Bank of England, Mark Carney, warned that the long period of 0.5% borrowing costs was coming to an end.Carney told businesses and consumers that Threadneedle Street would have to respond to the economy’s stronger growth by announcing the first tightening of policy since rates were increased to 5.75% in July 2007 – the month before the US subprime mortgage crisis erupted.Related: Buy-to-let boom could jeopardise financial stability, says Bank of England Continue reading...
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by Guardian Staff on (#EKB4)
Mark Carney, the governor of the Bank of England, says the UK can expect its first rise in interest rates since the financial crash. Speaking at Threadneedle Street, Carney says the period of 0.5% borrowing costs is due to come to an end. The warning reflects the Bank's concerns about high debt levels in the UK Continue reading...
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by Kate Connolly in Berlin on (#EK6E)
Rancorous Bundestag debate expected as dissenting members of chancellor’s centre-right coalition and leftwingers threaten to derail bailout for AthensAbout 50 German MPs from Angela Merkel’s ruling alliance are expected to revolt against the government and vote no to a third Greek bailout in the Bundestag on Friday.
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by George Arnett and Alberto Nardelli on (#EK0S)
Greece may have voted to authorise the deal but it also needs to be approved by other eurozone parliaments before any funds are releasedThe Greek parliament voted late on Wednesday evening to undertake the package of reforms needed to begin negotiations for an €86bn bailout programme. Despite 32 of its MPs voting against the plans, the Syriza-led government won out by 229 votes to 64.Greece is of course not the only parliament in the eurozone that will need to agree to a third bailout deal. Even in those countries that will not require a formal vote, tensions may emerge further down the road within governments that have small majorities.Greece's Creditors NOT just banks. Exposure of € zone countries poorer than Greece stand to lose up to 4.2% GDP http://t.co/i4QZ3w1xBsSoini: This was not a good day, there were no good option, we had to choose between plague and cholera. #GreeceBarclays: Official exposure to Greece in EMU by country and type pic.twitter.com/5QKkrsWr77The Greek compromise, reached on Monday, is considered to be tough and harsh. If it's so, it is the unfortunate outcome of ´Syriza Spring' Continue reading...
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by Patrick Collinson on (#EJ91)
Estate agents could face a drop in the confidence that is keeping house prices high, as an increase in base rate will drive up mortgage costsHomebuyers can wave goodbye to mortgages at just 0.99%. Savers can say hello to better rates for the first time in seven years. Investors will wobble as bond funds dive. But it is estate agents who have most to fear.Related: Interest rate rise set for new year, warns Bank of England governor Continue reading...
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by Helena Smith in Athens on (#EHMV)
As fears grow over bank closures, capital controls and a potential euro exit, Greek people are buying luxury goods to put their money in something tangible
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by Letters on (#EHKC)
Owen Jones, George Monbiot and other usually thoughtful commentators on the left are making a fundamental error when they advocate a “Lexit†campaign to promote UK withdrawal from the EU (The left must now campaign for Britain to leave the EU, 15 July). It would be a classic case of jumping from the frying pan into the fire. Do they really believe that working people throughout Europe would do better left to the mercies of financial and commercial interests, whose control over individual governments would be enormously increased by being able to divide and rule. The idea that there could be a Europe of free trade without elected democratic oversight would mean abandoning any hope of social justice and would be likely to bring about a competitive undermining of workplace rights and benefits.Owen Jones is surely right in thinking that if Labour really wants a revival it must come out and support BrexitThe EU now is beyond redemption. The mask is off, as John Hilary of War on Want put it at an anti-TTIP meeting this weekEven the Syriza government supports continuing membership of the euro and the EU Continue reading...
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by Nick Fletcher (until 12.30pm) and Graeme Wearden ( on (#EFNA)
The European Central Bank has provided more liquidity to Greece’s banking sector, after the Athens parliament approves bailout deal
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by Philip Oltermann on (#EHJ9)
Read the full text of the Guardian’s exclusive interview with philosopher and sociologist Habermas, in which he describes the agreement as ‘toxic’Guardian: What is your verdict on the deal reached on Monday?Habermas: The Greek debt deal announced on Monday morning is damaging both in its result and the way in which it was reached. First, the outcome of the talks is ill-advised. Even if one were to consider the strangulating terms of the deal the right course of action, one cannot expect these reforms to be enacted by a government which by its own admission does not believe in the terms of the agreement.The European Council is effectively declaring itself politically bankruptRelated: Greece’s rescue package: utter humiliation or disaster averted? | The panelRelated: Merkel 'gambling away' Germany's reputation over Greece, says Habermas Continue reading...
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by Heather Stewart, Rowena Mason and Phillip Inman on (#EHJB)
Mario Draghi reveals extra €900m in emergency funding and adds backing for debt writeoffs as hopes rise that Greek banks will reopen on MondayBanks in Greece could open their doors on Monday for the first time in three weeks, after the European Central Bank boosted emergency funding for the country’s financial sector by €900m (£630m) and threw its weight behind calls for debt relief for Athens.The ECB president, Mario Draghi, announced the extension of aid to the country’s banks while backing the idea – championed by the International Monetary Fund but rejected by Germany – that some of Greece’s debts will have to be written off.Related: Greek debt crisis: ECB raises emergency liquidity and pushes for debt relief - live updatesRelated: George Osborne backs down on use of EU bailout fund in Greece crisisRelated: Merkel 'gambling away' Germany's reputation over Greece, says HabermasRelated: British progressives and the European Union: should we stay or should we go? | Letters Continue reading...
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by Phillip Inman on (#EHEE)
Relative price of McDonald’s staple meal is 43% less in China than in US, according to The Economist’s fabled burgernomics measureChina’s currency is significantly undervalued against the dollar, according to the Economist’s latest Big Mac index, which found that the bestselling burger from McDonald’s cost 43% more to buy in the US than in the world’s second largest economy.The yawning gap between the Chinese yuan and the US dollar, documented in the latest index, indicates that another round in the Sino-US currency war could be looming, although experts cautioned against taking the index as a stringent measurement of currency strength. Continue reading...
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by Rowena Mason Political correspondent on (#EHCR)
In a compromise, chancellor reassures taxpayers there will be an ‘impregnable ringfence’ around the up to £850m of British-backed funds in the EFSMGeorge Osborne has backed down over the use of an EU bailout fund to give an emergency loan to Greece. But the chancellor said there would be an “impregnable ringfence†around the up to £850m of British money in the fund to prevent any losses to the taxpayer in the event of any default.The chancellor argued it was a major victory for Britain in the EU because he had made it a “red line†that UK funds would not be threatened. But Eurosceptics will paint it as an example of Brussels reneging on an agreement with the UK, as David Cameron thought he had secured an opt-out from the EU-wide bailout fund being used after it was set up to help Ireland and Portugal in 2010.Related: British progressives and the European Union: should we stay or should we go? | Letters Continue reading...
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by Apostolis Fotiadis on (#EH5Q)
The Greek prime minister, Alexis Tsipras, isn’t to blame for his party’s disintegration. Its roots lie in the party’s absence of coherent objectivesAlexis Tsipras survived last night’s vote in the Greek parliament, but not without witnessing the disintegration of his own party. Three ministers and 39 Syriza MPs refused to support the new memorandum of understanding voted in last night. The deal was passed with opposition votes. Technically Syriza still has a mandate, but in reality it will be unable to govern without these opposition votes.Among those who split away are renegade MPs from other parties that Syriza integrated before the last election to attract voters. The core rebels, though, come from the party’s hardline Left Platform. They include the ministers Panagiotis Lafazanis and Dimitris Stratoulis, who despite not voting for the deal refuse to leave office. A standoff also occurred with the speaker of parliament and the Syriza MP Zoe Konstantopoulou. Disliked by many for her outspoken manner, Konstantopoulou voted against her own party last night. Syriza now faces a split that is not only about the deal but also about who will shape the future of the party.Related: Greek MPs pass austerity bill as Athens police clash with protestersThe absence of a clearly defined strategy initially helped to boost the numbers of party supporters Continue reading...
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by Seumas Milne on (#EGX5)
This attempt to turn Athens into a debt colony will fail – and open the way to the breakup of the eurozoneYou couldn’t have had a clearer demonstration of what democracy now counts for in Europe than this week’s immolation of Greece. In January, after five years of grinding austerity imposed by the troika of creditors had shrunk its economy by a quarter and pushed millions into poverty, Greeks rebelled and elected an anti-austerity government.Following months of fruitless negotiations, the country voted last week to reject the latest cuts, tax rises and privatisations demanded to deal with the disastrous impact of the first phase of austerity. The response of the eurozone’s masters was immediately to ratchet up the pain still further. For the “breach of trust†of daring to put the terms to its people, Athens was to be punished. So on Monday – threatened with expulsion from the eurozone and economic collapse courtesy of the European Central Bank’s cash blockade – the Greek prime minister, Alexis Tsipras, bent the knee.Related: The left must now campaign to leave the EU | Owen JonesWhat kind of a union treats one of its members like a recalcitrant colony and dismisses its democracy as an affront? Continue reading...
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by Jennifer Rankin in Brussels, Nick Fletcher and Phi on (#EGCS)
Funding comes as eurozone finance ministers scramble to assemble €7bn bridging finance to keep economy afloatGreek banks will benefit from an extra €900m (£630m) in emergency funding to keep them afloat, the European Central Bank has announced, possibly allowing bank branches to open on Monday.Mario Draghi, the ECB president, said a majority of the central bank’s governing council had voted in favour of the move that brings the institution’s support for Greek banks to €130bn in total. Continue reading...
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by Robert Skidelsky on (#EGEK)
Cutting tax credits and raising the minimum wage puts the onus of income on having a job - jobs which are increasingly at riskMost rich countries now have millions of “working poor†– people whose jobs do not pay enough to keep them above the poverty line, and whose wages therefore have to be subsidised by the state. These subsidies take the form of tax credits.The idea is a very old one. England implemented its “Speenhamland†system – a form of outdoor relief intended to offset rising bread prices – during the Napoleonic Wars. In 1795, the authorities of Speenhamland, a village in Berkshire, authorised a means-tested sliding scale of wage supplements. The supplements that families received varied with the number of children and the price of bread. Continue reading...
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by Philip Oltermann on (#EGC1)
Exclusive: Intellectual figurehead of European integration says efforts of previous generations put at risk by Angela Merkel’s hardline stance on GreeceJürgen Habermas, one of the intellectual figureheads of European integration, has launched a withering attack on the German chancellor, Angela Merkel, accusing her of “gambling away†the efforts of previous generations to rebuild the country’s postwar reputation with her hardline stance on Greece.Speaking about the bailout deal for the first time since it was presented on Monday, the philosopher and sociologist said the German chancellor had effectively carried out “an act of punishment†against the leftwing government of Alexis Tsipras.Related: Eurozone scrambles to assemble €7bn bridging finance to keep Greece afloatRelated: Protests against austerity in Athens and Berlin - in pictures Continue reading...
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by Agence France-Presse on (#EF5M)
Prime minister plans to provide skills training to more than 400 million people to tackle workforce shortagesIndia’s prime minister, Narendra Modi, launched a programme on Wednesday aimed at imparting skill training to more than 400 million Indians over the next seven years “to make India the world’s human resource capitalâ€.
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by Helena Smith and Emma Graham-Harrison in Athens, B on (#EESP)
Alexis Tsipras drives through tax increases and pensions shakeup amid angry splits in his Syriza party
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by Guardian Staff on (#EEWH)
The treasurer, Joe Hockey, outlines his plans for Australian tax reform at a PricewaterhouseCoopers lunch in Melbourne on Wednesday. He says superannuation tax must not take money from those who have worked hard to take care of themselves, and that state, corporate and income tax reform is needed to boost Australia's economic competitiveness Continue reading...
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by Josie Le Blond in Berlin on (#EEG9)
Divisions emerge within Angela Merkel’s CDU party over whether to back deal as demonstrations take place in 14 cities over austerity package imposed on GreeceProtesters have taken to the streets in 14 German cities to show their anger with their government’s handling of the Greek crisis, as opposition to the bailout deal appeared to be growing within Angela Merkel’s Christian Democrat (CDU) party.Anti-austerity demonstrations by a vocal minority of Germans took place in cities including Berlin, Frankfurt and Hamburg, with the radical left in the EU’s economic powerhouse proclaiming its solidarity with those across the world who are furious with Berlin for its role in forming Monday’s agreement.Related: Greek bailout: Angela Merkel accused of blackmailing AthensRelated: Greek crisis: Protests in Athens turn violent as Tsipras urges MPs to back him - live updatesRelated: Measured, sober and sceptical: Germany reacts to Greece deal Continue reading...
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by Graeme Wearden (back again) and Nick Fletcher(12 - on (#EC2P)
Riot police have clashed with anarchist groups in Athens tonight, as Greece’s PM Tsipras faces rebellion over the country’s bailout plan
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by Heather Stewartand Helena Smith on (#EE5B)
Embattled prime minister fights to outflank opposition to eurozone agreement as riot police use teargas on demonstrators outside Athens parliamentAlexis Tsipras is fighting for his political life as he seeks parliamentary backing for the severe austerity measures Greece has pledged to take in exchange for a fresh bailout from its eurozone partners.The Greek prime minister urged his Syriza colleagues to support him in the make-or-break vote on Wednesday night, even as the International Monetary Fund – and his own former finance minister and right-hand man Yanis Varoufakis – savaged the deal struck in the early hours of Monday morning.Related: Eurozone bailout deal: what do ordinary Greeks think? Continue reading...
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by Editorial on (#EE5X)
The government’s proposal takes a legislative sledgehammer to a small problem and will have widespread collateral damageThe government has found another windmill to tilt at, another phantom enemy for its pantheon of society’s imaginary ills to sit alongside threats like NHS tourism and BBC bias. This time, it is a perennial favourite: trade unions and the right to strike. The timing is propitious. Less than a week after the inconvenience of the most extensive tube and train strike for 10 years, millions of commuters in London and the south-east are in unforgiving mood. Parents dread the next round of teaching strikes. The Labour leadership contest offers its customary field day for critics avid to exploit evidence of union influence. It puts the party in the unpopular position of a full-throated defence of trade unions that is not universally deserved. By imposing the requirement to ask every union member to opt in to paying the political levy every five years, it undermines the main source of Labour party funding. But it fails to tackle the big question of paying for politics – something on which all parties had previously sought consensus.There is Conservative political advantage to be had too. It will cheer the CBI, which was unimpressed at being instructed to raise pay rates by the chancellor in the budget last week. It will delight the party’s right as it braces for the EU referendum. It almost seems as if the business secretary Sajid Javid has been studying the playbook of the Republican presidential hopeful Scott Walker. As governor of Wisconsin, in 2011 he withdrew the collective bargaining rights of most of the state’s public sector workers, provoking a sit-in that prefigured the Occupy movement. He came back for more this year, making Wisconsin a “right to work†state, that is ending the mutuality of union membership by entitling all workers, regardless of whether they are due-paying union members, to share in what are the often extensive benefits of membership. The result, research suggests, is lower wages and benefits for all. But Mr Walker’s militant anti-trade unionism is his calling card for the presidency. His intention was to set one group of workers against the rest, in his own words, to divide and conquer. This is partisan politics, and it is lousy policy. Continue reading...
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by Max Höfer on (#EE00)
Disaster may narrowly have been averted for the eurozone, at the expense of Greece’s political autonomy. But it won’t take much for it all to crash downThe last act of the classical Greek tragedy ends with two outcomes: disaster and catharsis. In the current Greek debt drama, however, there has been no catharsis. The purification has failed to materialise.It would have meant that both sides had seen the error of their ways and come to their senses. Instead, the madness continues: Greece will take on €86bn of debt in addition to the existing €317bn (not including the emergency loans from the ECB). From Angela Merkel through François Hollande to Alexis Tsipras, all eurozone government leaders assert that Greece will emerge from over-indebtedness more quickly this way and will be economically healed in three years. Europe pretends that the bailout will help. And Greece acts as if everything is fine now.The troika is not operating as a trustee, but representing highly selfish interestsRelated: The euro ‘family’ has shown it is capable of real cruelty | Suzanne Moore Continue reading...
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by Patrick Kingsley in Thessaloniki on (#EDY8)
In the city where the party unveiled its manifesto, many of the grassroots feel betrayed by the bailout and blame Greece’s leader for not calling the troika’s bluffIn Thessaloniki this week, some Syriza activists have found brief relief in a bit of gallows humour. You can buy many kinds of local pastries, or bougatsa, in the city – bougatsa with cheese, cream, or mince meat. “Soon we’ll be having bougatsa with memorandum,†smiled Syriza activist Tassos Gkouvas, as he drank coffee on Wednesday with Athina Teskou, a member of the local party’s governing committee.
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by Jennifer Rankin in Brussels on (#EDWF)
Money from an EU bailout fund would enable Athens to meet debt obligations and other expenses of the government such as wagesThe European commission has proposed a €7bn (£4.9bn) emergency loan for Greece from an EU bailout fund, defying the UK and other non-eurozone countries that object being on the hook for a crisis in the currency union.
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by Jana Kasperkevic and agencies on (#EDFD)
Federal Reserve chair Janet Yellen says the increase will happen ‘if the economy evolves as we expect’, while both the euro and oil prices fellUS stock prices held steady on Wednesday as the Federal Reserve chair, Janet Yellen, again suggested there would be an interest rate increase by the end of the year, while the euro fell ahead of a Greek government vote on whether to accept tough terms for a vital third bailout.Oil prices fell on worries of growing supply from Iran following a landmark deal that would lift sanctions that have curbed its oil sales for several years.
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by Jan Svejnar on (#ED6Y)
My research found that the myth of billionaires boosting the economy is untrue – particularly when they amassed their wealth from political connectionsAfter I escaped communist Czechoslovakia in 1970, I enrolled at Cornell University. In my introductory sociology course there, I was taught that becoming a billionaire was impossible – realising the “American dreamâ€, at least at the very top of the income scale, was effectively no longer an option. The last few decades have certainly proved this thesis wrong.This shift has had significant consequences for income and wealth inequality not just in the US, but also in many countries around the globe. In fact, the top 1% globally will soon hold over half the world’s wealth. And their share is growing. This stunning fact makes it all the more important to ask what this means for the rest of us. Given the amazing level of accumulation of wealth at the top, improving our understanding of the economic role of billionaires has certainly become a public policy issue of the highest order.We discovered that billionaire wealth arising from being politically connected has a strongly negative effect on growthRelated: Britain has world's most billionaires per capita Continue reading...
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by Heather Stewart on (#ECVZ)
Prime minister Alexis Tsipras, who has lost a key minister unwilling to support measures, must keep number of rebels to fewer than 40 to pass voteAlexis Tsipras, the Greek prime minister, is preparing for a make-or-break parliamentary vote over the austerity measures Athens must take in exchange for a fresh bailout from its eurozone partners.
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by Rowena Mason Political correspondent on (#ECTM)
Plan is a blow to British PM David Cameron who thought he had secured a ‘black and white’ opt-out from further bailouts for eurozone countriesThe European commission has defied George Osborne, the UK chancellor, by formally proposing an emergency loan for Greece through an EU-wide bailout fund using up to £850m of British contributions.
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by Larry Elliott on (#ECP9)
In a short, sharp and merciless analysis of the bailout terms for Athens, the International Monetary Fund predicts we will all be back here again soonThe timing was impeccable. A day after Greece and the eurozone concluded bailout negotiations, but 24 hours before the hugely contentious deal had been voted on in Athens, the International Monetary Fund dropped a bombshell: the agreement won’t work.In four crisp pages, the IMF’s updated debt sustainability analysis ripped to shreds the notion that Greece will be able to deliver on the promises it has been forced to make in order to keep its banks open and stay in the single currency. Continue reading...
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by Guardian Staff on (#ECHA)
The International Monetary Fund’s devastating critique of the terms facing Athens Continue reading...
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by Phillip Inman Economics correspondent on (#ECG9)
Latest data shows wages increase by more than 3% but jobless rise causes concern that employers have to shell out more due to dearth of skillsBritain enjoyed a bumper pay rise in spring, with average earnings 3.2% higher in the period from March to May 2015 than a year earlier, highlighting the increasing skills shortages forcing employers to offer higher wages.But the better earnings figures, from the Office for National Statistics, came as unemployment rose for the first time in two years, sparking fears that Britain’s booming labour market has lost some of its momentum. Continue reading...
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by Alberto Nardelli on (#ECDJ)
A brutal assessment of the bailout terms facing Athens by the International Monetary Fund calls for substantial debt relief for a further 30 yearsJust hours before the Greek parliament’s crucial vote to push through fresh austerity measures required by the new bailout plan, the International Monetary Fund released a devastating assessment of the beleagured nation’s finances.Warning that Greece will require far more generous debt relief than is currently on offer from its creditors, it predicted that public debt is likely to peak at 200% of its national income within the next two years.Related: Greek crisis: MPs debate bailout after IMF demands debt relief - live updatesRelated: Why the IMF should not aid a Greek bailoutRelated: Alexis Tsipras: bailout a ‘bad deal’ but the best Greece could get Continue reading...
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by Lucy P Marcus and Stefan Wolff on (#EC77)
As well as data, economic deals ultimately depend on the amorphous yet essential qualities of integrity, trustworthiness, and interpersonal chemistryToday’s decision-makers are supposed to embrace the virtues of big data, relentlessly pursue quantitative metrics, and then adhere to the optimal course of action that these powerful tools supposedly indicate. Yet if there is one thing that the Greek crisis has made clear, it is the importance of the human factor in negotiations. People and their personalities, and the way they perceive one another, can make small debts seem unserviceable or large debts disappear with a handshake.
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by Patrick Wintour Political editor on (#EB41)
Business secretary Sajid Javid to criminalise unlawful picketing, and make it harder for workers to strike legally and for Labour to get union fundingThe biggest crackdown on trade union rights for 30 years will be unveiled on Wednesday, including new plans to criminalise picketing, permit employers to hire strike-breaking agency staff and choke off the flow of union funds to the Labour party.It is clear the Tory ​​party ​high ​command intend to make Labour bankrupt by cutting off the main source of fundingRelated: Frances O’Grady: ‘My members are the wealth creators, but don’t get a fair share’ Continue reading...
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by Katie Allen on (#EBTC)
Relief for squeezed households tempered by concerns that stronger pay growth could have knock-on effects for inflation and warrant an interest rate riseOfficial figures are expected to confirm that wage growth continues to pick up in the UK and has hit a five-year high, bringing relief to households after years of squeezed living standards.Economists polled by Reuters have pencilled in a 3.3% annual rise in average pay packets during the three months to May. At the same time, they expect unemployment to be held at a seven-year low of 5.5%. Continue reading...
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by Rafael Behr on (#EBTE)
All week this series looks at the questions Labour will need to answer if it is to win the next election. Today, what is the best size and shape of the state for the 21st century?The Hungarian mathematician George Polya had a rule for dealing with anything that looks intractable: “If you can’t solve a problem, then there is an easier problem you can solve: find it.†This applies in politics too. One of the hardest problems Labour faces is how to rebuild a reputation for economic competence when the Conservatives have successfully painted the opposition as unrepentant budget wastrels. To concede the point feels like surrender on enemy terms: accepting a mendacious account of what caused the financial crisis; signing up to cruel cuts. Yet to dispute the point looks like denial of political reality – blaming the voters instead of listening to them.So, following Polya’s maxim, how does Labour find a solvable problem within the unsolvable one? The trick is to take the Tories (momentarily) out of the equation. Posit super-benign circumstances in which there is no blame for the great crash and even George Osborne says all fiscal paths are equally valid. In this fantasy land the left would still have to confront failings of the Labour state that cannot simply be cast as inadequate funding or corruption by private enterprise.There is a vast political space between monolithic state control and a privatised market free-for-allRelated: Who should Labour speak for now? | John HarrisRelated: Britain won’t recover while its economy is dominated by magical thinking | Aditya Chakrabortty Continue reading...
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by Reuters on (#EB67)
Prime minister tells Greek TV he will not resign and defends his abrupt change of course over debt crisis
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