Now is the time for firm German leadership on the Greek crisisThis is a moment that demands both clear thinking and swift action by European leaders, qualities not so often displayed in a union usually characterised by ambiguity, complexity and delay. Those are necessary lubricants in everyday Europe, a collective that always has to live with contradictions and differences. But Europe after Greece is not everyday Europe. It is a union perilously close to a disaster that, while certainly not terminal, could be very damaging indeed.Simply put, those leaders, above all Chancellor Angela Merkel, have to decide whether they want to keep Greece in, or whether they will let that unhappy country slip away. If Greece leaves the euro, there is no guarantee that it won’t leave the EU altogether. After the referendum these are no longer speculative possibilities, lying somewhere beyond the latest deadline for this or that repayment. They are here now, right in Europe’s face, needing resolution within a matter of days or, at the very most, weeks. Measures of immediate economic support, putting the Greek economy on hold until then, are probably needed within hours.Europe desperately needs her to transcend her nature, to rise to the occasion and to take decisive charge of the crisis Continue reading...

The Global Minotaur of neoliberal capitalism centred on Wall Street held the world to ransom from 1971 to 2008. Now Europe’s surplus countries are trying to prop up its corpseBankruptocracy is as much a European predicament as it is an American “invention”. The difference between the experience of the two continents is that at least Americans did not have to labour under the enormous design faults of the eurozone. Imagine their chagrin if the citizens of hard-hit states (eg Nevada or Ohio) had to worry about a death embrace between the debt of their state and the losses of the banks who happened to operate within the state.Europe's architecture was not sound enough to sustain the shock waves from the death throes of neoliberal capitalismThe Minotaur’s surplus recycling was essential to the maintenance of the eurozone’s faulty edifice Continue reading...

Mining investment has shrunk rapidly and the transition from the boom relies heavily on housing investment – that’s a rather large concernThe biggest issue in the Australian economy remains the transition from the mining boom. Figures out late last week showed how quickly mining investment has shrunk, and how greatly the transition is dependent upon investment in dwellings. That’s a rather large concern, given worries about a housing bubble.One graph can often convey what is going on with amazing clarity. This is the one that demonstrates why the end of the mining boom is a problem for Australia’s economy: Continue reading...

The last week has seen many extraordinary things, from stiff limits at cashpoints to cross-border meddling in national democracy. Europe has not handled it well. It urgently needs to do better in picking up the piecesKicking the can down the road has been the cliche of choice over a slow euro crisis that has steadily strangled the life out of the Greek economy. But at some point Europe was bound to run out of road. That happened on Sunday night, when it emerged that the Greek people had said no to continuing to engage with their creditors on the same suffocating terms.Just over a week ago, Alexis Tsipras staked his future on forcing this denouement. The eight days that followed his midnight declaration of a plebiscite, to accept or reject the creditors’ terms for the latest slug of overdraft, have witnessed many extraordinary things. The Greek parliament licensed a hasty referendum on a question that had already been overtaken by events. A ballot paper written in jargon posed a ludicrously technical question, opening up a void for emotion to fill. Mixing talk of “terror” from their partners with haze about what would happen after a no, Mr Tsipras and his finance minister, Yanis Varoufakis, aimed squarely for the heart rather than the head. Meanwhile, Greeks faced the fiercest financial controls ever seen in modern Europe: bank doors were shut, supplies disrupted, and citizens queued at every cashpoint for their ration of notes. In countries such as Germany, where history engenders suspicion of referendums, it may have looked like a paradigm case of how not to do democracy. Continue reading...

Holding up the threat of financial meltdown is a gift for chancellor whose budget on Wednesday will contain significant spending cutsIt is almost 20 years since Ken Clarke delivered the last purely Conservative budget in the dog days of John Major’s government. A lot has happened since the Cool Britannia year of 1996: the economy has boomed and gone bust; the euro has arrived; an independent Bank of England sets interest rates; and the gap between the super rich and the rest has widened.All these developments will shape the package of measures George Osborne is to announce on Wednesday. In 1996, Clarke realised his party was going down to defeat. Knowing it was his swansong, he included spending cuts in his last budget, little thinking that Gordon Brown would stick to them. Osborne, by contrast, has the assurance of the victor, of a chancellor who knows that he can plan for a whole parliament and is already thinking about how to win again in 2020. Continue reading...