Economics | The Guardian

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...

The president of the Eurogroup Jeroen Dijsselblom appeals to the Greek authorities to submit further proposals in the hope of a financial deal, after previous measures were judged to be lacking in 'credibility and seriousness'. Greece must reach a new deal with its creditors by 30 June or risk defaulting on its debts, but talks broke up early on Thursday with no agreement in sight Continue reading...

Oxford-educated economist is well qualified as the point man in negotiations between Athens and international creditorsFor those who thought the battle to save Greece was all about a rag tag bunch of leftists finally seeing the light, Euclid Tsakalotos has made many think again.At the eleventh hour, the Oxford-educated economist has emerged as Athens’ secret weapon, sounding every inch the man he was raised to be: a public school member of the British establishment. “It is rather surprising to the other side,” he says, the Greek parliament framed in the window of his eighth floor office. “But so, too, is the fact that I understand their economic arguments.” Phlegmatic, professorial, mild-mannered, Tsakalotos has spent the best part of 30 years in the ivory towers of Britain and Greece “engaging critically” with neoclassical economic thinking.Related: Eurozone talks end without deal as Greek proposals rejected Continue reading...

Finance ministers have given a “strong signal” to Greece to engage seriously, as crisis escalates again

The Greek economy would be better off outside the euro, say some, but devaluation may only work in countries with thriving trading partnersThere is a beguiling argument that life for Greece outside the eurozone wouldn’t be so bad. Sure, the immediate economic pain would be severe, but a new drachma, coupled with debt default, might deliver a whoosh of relief in time. Isn’t history full of countries that have devalued their way out of crisis by generating an export boom? Didn’t Argentina recover that way when it abandoned its currency peg to the US dollar in 2002?Taken to its logical extreme, this argument says the real threat to the survival of the eurozone is that Greece leaves and prospers. Come the next crisis, other strugglers might opt to quit, dumping their debts as they go. Continue reading...

What would the effects be of a Grexit and is it the worst scenario for the eurozone?Why is a Greek deal so urgent?

Meeting called for Monday as finance ministers still cling to hopes for a deal after brittle summit ends without agreement on debt crisisTalks to end the debt crisis that has engulfed Greece broke up early on Thursday, despite Athens presenting a raft of new reform proposals to eurozone finance ministers in a bid to secure a deal. A summit of eurozone leaders was immediately called for Monday in a bid to find a solution to the mounting crisis.The Greek finance minister, Yanis Varoufakis, talked for half an hour at the Luxembourg meeting and distributed a five-page memorandum of fresh policy changes, according to sources at the meeting, but failed to persuade the debt-stricken country’s creditors that they could form the basis for an agreement.Related: 'Making us poorer won't save Greece': how pension crisis is hurting its peopleRelated: Greece says it will run out of money by end of month without bailout deal Continue reading...

Retail sales figures, which don’t include restaurants, hotels and foreign travel, show just a 0.2% increase on previous monthThe petrol price dividend from price falls at the pumps is being spent on eating out, trips abroad and short breaks to Britain’s growing number of boutique hotels.That appears to be the message from May’s retail sales figures, which don’t cover restaurants, foreign travel and the hotel trade and ticked up just 0.2% on the previous monthThe UK’s economic growth remains unbalanced and is too reliant on consumer spending Continue reading...

Economics editor Larry Elliott assesses Thursday's negotiations between Greece and the International Monetary Fund. Finance ministers from across the eurozone have converged on Luxembourg to discuss the state of Greece's economy, which has less than a fortnight to reach a deal with creditors before its bailout expires. Who has the biggest headache? Angela Merkel, the German chancellor ... or Alexis Tsipras, Greece's prime minister? Continue reading...

Christine Lagarde, the head of the International Monetary Fund (IMF), says on Thursday that Greece has no chance of a 'grace period' over its €1.6bn repayment due to the IMF on 30 June. Lagarde's comments come as finance ministers from across the eurozone have converged on Luxemberg to discuss ways to resolve the crisis amid fears of Greece's possible exit from the single currency Continue reading...

Everyone from the president to trade analysts can speculate on what the Trans-Pacific Partnership will mean for the US economy, but the simple fact remains: no one can see the futureAfter all the shouting, are we any closer to knowing whether free trade agreements are good or bad for the country – and for your wallet?The attempts to provide answers to those questions have been thrust into the spotlight by President Barack Obama’s futile last-minute efforts to salvage his power to freely negotiate what would be the world’s largest free trade pact, the Trans-Pacific Partnership. Continue reading...

German chancellor tells Bundestag the Greek government failed to honour commitments made with lenders to implement structural reformsAngela Merkel has delivered an unusually sharp rebuke to the Greek government, accusing it of failing to implement necessary structural reforms while insisting a last-minute deal was still possible to keep it in the eurozone.

This neighbourhood was unfairly identified as ground zero for the foreclosure crisis. Eight years later, it’s coming back up – without the help of federal fundsWhen Anthony Trzaska hears the words “Slavic Village” in news reports, he knows what is coming next. “It’s almost like when the media reports anything on Slavic Village, it’s followed with: ‘Comma, where the foreclosure crisis in America started,’” says the 31-year-old resident. “It’s not like the foreclosure mess didn’t happen. But it didn’t just happen here.”Cleveland’s Slavic Village is widely perceived as the epicentre of the Great Recession. In 2007, when the media finally realised that the housing bubble was bursting wide open (about two years after 48 states had sued subprime lender Ameriquest for fraudulent loan practices), a few journalists decided to run some zip codes to see where the most foreclosures were happening. Continue reading...

Report notes numbers of people relying on food banks has doubled in a year and criticises ‘lack of progress’ regarding 23% of Welsh population living in povertyThe Labour-led Welsh government has been severely criticised by an assembly committee for its “lack of progress” in reducing poverty.Women, children and refugees are among the groups who have been particularly badly affected, according to a damning report published on Thursday. Continue reading...

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Central bank issues chilling warning that Greece could be thrown out of the European Union unless it reaches a deal fast