Greece

Hugo Dixon: How Greece can cut a goodish deal

4 Jun 2015

Athens’ creditors haven’t quite delivered an ultimatum. Greece can probably get somewhat less austerity and an indication of some debt relief if it plays ball. The PM’s best option is to make one last push for concessions, then sign the deal, even if it splits his party.

Hugo Dixon: Greek ultimatum is a bad idea

1 Jun 2015

Some say the euro zone and IMF should present Greece with a take-it-or-leave-it offer, set a deadline, and threaten to cut off its banks if it doesn’t agree. This could play into the hands of Greek nationalists who would argue that foreigners were again bullying Athens.

Greece cries wolf, genuine beast may lurk

26 May 2015

Greek ministers are threatening a default on IMF loans. They might be bluffing, like Aesop’s shepherd boy. That scamp found that lying does not pay. The Syriza government may know more about extreme game theory, but it could end up out of the euro zone, or mauled by the ECB.

Hugo Dixon: Greece needs a second election

25 May 2015

Most scenarios facing the country are bleak, but there is one outcome that is not too bad. This will require the prime minister not only to eat his words, but also to call a new election to get a fresh mandate. The timing is tough, but just doable.

Debt extension could help Syriza but hurt Greece

22 May 2015

Europe could split off payments owed to Greece from its second bailout, according to reports. The move could break an impasse over reform talks and avoid a messy default. Yet Europe would have less leverage over the Syriza-led government and the Greek economy would suffer. 

ECB can live with bankrolling Greece

19 May 2015

Athens’ borrowing from the European Central Bank has Germany’s Jens Weidmann fretting over euro zone rules that prohibit monetary financing. The ECB’s guilt depends on the severity of its judge. In the real world, its pragmatic approach looks defensible and effective.

Athens and Europe should rethink their Greek myths

15 May 2015

Both debtor and creditors are telling tales which leave out key facts. The incomplete and incompatible narratives make agreement on the next bailout harder, and the risk of a crisis greater.

Hugo Dixon: Greece seemingly has no Plan A or Plan B

11 May 2015

It owes around 324 billion euros. The government doesn’t seem to have a credible plan for reaching agreement with its creditors. Nor does it appear to have thought out how to default while containing the collateral damage.

Greek bargaining position stronger than it looks

22 Apr 2015

Athens may well not repay its ECB debt by July. But things would only get really nasty – via capital controls and bust Greek banks – if member states deem this a hard default. If they choose to, Greek leader Alexis Tsipras could blame them – and lead his country out of the euro. 

Euro zone needs to reinforce its founding myth

21 Apr 2015

The single currency is supposed to be irreversible. Yet European policymakers regularly conjure up the risks of Greece’s euro exit. No wonder potential Greek IOUs elicit vastly divergent reactions to actual Californian ones. This difference suggests how the euro zone can change.

Grenada offers debt restructuring model for Greece

9 Apr 2015

The Caribbean island is close to agreeing a deal with creditors after years of wrangling. The deal structure, including warrants and phased debt relief, is equitable, and provides incentives for reform. It looks like a decent model for Ukraine—or even Greece.

Europe’s scars from Greece would run deep

7 Apr 2015

Warren Buffett is among those who reckon a Greek exit could make the euro zone stronger. Losses are manageable, other countries won’t follow immediately, and the shock may even prompt excess debt to be tackled. But political and economic tensions would be dangerously magnified.

Hugo Dixon: Greece has two weeks to produce red meat

7 Apr 2015

The default scenario is off the table for the time being after Athens confirmed it would meet a payment to the IMF on April 9. But it will probably be back by late April if Greece doesn’t come up with some serious reforms on pensions, tax and banking.

Greece comes kicking and screaming to reform table

2 Apr 2015

The Syriza government’s latest reform proposals include some concessions to its public creditors. The plan still lacks detail, and reneges on past promises. The government is fiddling while Athens burns, and the risk of an accidental euro zone exit is rising.

Hugo Dixon: Tsipras needs rupture with far left, not Brussels

30 Mar 2015

Even if Greece avoids imminent default, its prime minister will have to break with radical allies before Athens’ position in the euro zone is secure. It is not clear he has the courage to do so. But such a move would make far more sense than a break with euro creditors. 

ECB torn between two roles in Greek bank support

20 Mar 2015

The central bank’s monetary policy wing has delayed a plan by its supervisory arm to legally stop Greek banks increasing their stocks of illiquid assets. The stability-searching supervisors have the right idea. But the policy group has an even higher political responsibility. 

Hugo Dixon: Is the ECB being unfair to Greece?

11 Mar 2015

The new left-wing government complains the euro zone central bank is meting out tougher treatment than it gave the previous right-wing administration. The difference is justified since Athens isn’t working well with its creditors. If that changes, the ECB should be more flexible.

Hugo Dixon: Greece has no good Plan Bs

9 Mar 2015

Defaulting on its debts and quitting the euro would be a disaster. So would imposing capital controls, while defaulting and staying in the single currency. Athens has no rational course of action apart from working with its creditors to vigorously reform its economy.

Greece’s U-turns have only just begun

2 Mar 2015

Last week the new government asked for an extension of the old bailout programme, despite pledging to rip it up. If Greece is to avoid going bust, it will have to make three more somersaults in coming months. The faster it does them the better.

Europe can afford to cut Greece some slack

27 Feb 2015

Athens wants to slice its primary fiscal surplus to one-third of the level agreed in its current bailout programme. That might leave debt too high for comfort – yet there is room for a compromise that Greece’s euro zone partners could afford.