Debate: Greek economy The Debate - Press TV - Mon29Dec2014 Greece is going to hold snap elections on January 25 after parliament failed to elect a new president. Meanwhile, the International Monetary Fund (IMF) has suspended its financial aid to Greece until the formation of a new government in the debt-ridden country. Polls show that the radical leftist party, Syriza, will most probably win the elections. Syriza is a fierce opponent of Greece’s bailout deal with the IMF and eurozone countries, and has vowed to reconsider the austerity measures that have caused mounting dissatisfaction in the country. In this edition of The Debate, Press TV has conducted an interview with Tony Gosling, investigative journalist from Bristol, and Brent Budowsky, columnist at The Hill from Washington, to further discuss developments in Greece. http://www.presstv.ir/detail/2014/12/29/392371/greek-economy/ The second coming of the radical left Issue: 135 Posted: 28 June 12 Alex Callinicos Crunch-time for the eurozone? Nearly five years after it started, the global economic and financial crisis shows no signs of resolving itself. On the contrary, in Europe it is taking a more virulent form, as the eurozone inches towards some kind of moment of truth. The slow motion catastrophe in Europe threatens to kill off the chronically weak recovery in the US. This is part of a global levelling down process, as the Chinese economy, which has since 2009 provided the main motor of revival, itself runs out of steam. The Financial Times reported in mid-June: The FT/Brookings Tiger index [which is supposed to track the global economic recovery] showed world growth stalling after an initial rapid recovery from the 2008-09 economic crisis. Growth in the US was slowing, much of Europe is in recession, China’s growth outlook has weakened, the reform processes in India have stalled and other large emerging economies have slowed dramatically. Prof [Eswar] Prasad [of Brookings] said: “The engines of world growth are running out of steam while the trailing wagons are going off the rails. Emerging market economies are facing sharp slowdowns in growth while many advanced economies slip into recession”.1 One can analyse what’s happening at three levels. The first and most immediate centres on Greece. Here politics is in command: will the popular revolt against the parties supporting the Memorandum of Understanding between the Greek state and its people’s tormentors (the troika of the European Central Bank [ECB], the European Commission and the International Monetary Fund [IMF]) precipitate Greece into jumping or being pushed out of the eurozone? Most commentators agree the success of New Democracy, the main party of the Greek right, in squeaking narrowly ahead of Syriza (the Coalition of the Radical Left) in the general election of 17 June has merely bought a little time. The economist Nouriel Roubini tweeted that night: “In 6-12 months ND-Pasok gov will fall as economy will fall into a depression. Then new elections will lead Syriza to win & Grexit to occur”.2 Much more on the politics below; the economics of the Greek agony is mainly about the impact of a “Grexit” and whether it would spread contagion to other vulnerable members of the eurozone: at present Spain is most in the firing line. This takes us to the second level of analysis. The eurozone crisis is the specific European form taken by the bursting of the financial bubble that gripped advanced capitalism in the middle of the last decade. What this involved was a great surge in bank lending, which financed a series of speculative booms, often centred on the property market. A recent analysis by the Financial Times’s Alphaville blog called “The Rise and Fall of European Banking” cites a Citibank study showing how European banks led the surge in cross-border lending (largely in this case within the European Union itself) in the last decade: Global bank assets increased c160 percent from 2002 to 2008. Over this period, EU banks’ global assets increased c190 percent, with France leading the way (+250 percent). Several EU bank systems’ global assets, including France, the UK, Sweden, Greece, Ireland, Denmark and Netherlands, increased over 200 percent over this period.3 But this process has, since the 2008 crash, gone into reverse. To quote Citibank again: “Europe ex UK is the exception to the post 2009 international bounce back theme. Naturally more exposed to the second leg of the global financial crisis—the euro sovereign and banking crisis—European ex UK banks have reduced their overseas exposures in the past year, three and five years.” While US, British and Japanese banks have held on to their shares of global banking assets, those in continental Europe have seen their share fall.... http://www.isj.org.uk/?id=819

• published: 01 Jan 2015
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