We use cookies to help improve and maintain our site. More information.
close

June 08, 2016

Getting real on debt relief

In an interview with Les Échos Olivier Blanchard argues that another round of debt relief is necessary for Greece. Alexis Tsipras cannot implement the reforms Europeans want him to if they are not conducive to growth. There is no sense in obliging Tsipras to reforms for which he has no popular mandate, and to insist on a 3.5% primary surplus at all costs. Growth has to rebound, even if it is feeble in the beginning. This will change the climate in the country and create new dynamics. 

Martin Wolf calls it a big extend-and-pretend: the eurozone pretends Greece is not in default and Greece pretends it is reforming. From the IMF’s debt sustainability analysis it is clear that debt relief is unavoidable. Of course, both sides can continue with their extend and pretend game, kicking the can down the road. Alternatively, European creditors could get realistic on debt relief and the primary surplus target and offer concessions on both in exchange for real reforms. A third option is to acknowledge that Greece is better off outside the eurozone. With the trade balance still in deficit despite the recession, the Grexit debate is likely to reemerge once the deficit rises again. For the IMF, Wolf recommends that they get clear on their own position. If the fund does not get concessions from Germany on debt relief, it should walk away. It may not save Greece, but it could at least save itself.

Show Comments Write a Comment

June 08, 2016

The re-alignment of the Italian right

Italy's newspapers have been full of post-election analysis. We noted that Matteo Salvini, the leader of the Lega Nord, has come out in support of two candidates from the Five Star Movement for the second round of the mayoral elections: Virginia Raggi in Rome and Chiara Appendino in Turin. The importance of Salvini's endorsement of Raggi and Appendino lies in the impact this will have on the right of Italian politics. In past elections the Lega was aligned with Silvio Berlusconi's Forza Italia. For the Rome mayoral elections the two parties supported different candidates. This split of the vote enabled the PD candidate to come second. If you take the total sum of the votes, the Five Star Movement performed well, though the PD did better overall due to the voting system. But it is becoming increasingly clear that the Five Star Movement is the real opposition to the PD - and that it is supported by parts of the populist right. Berlusconi, meanwhile, said he will cast a blank vote at the Rome elections.

One of the problems for Matteo Renzi and his party is the lack of a strong economic recovery. There are still no signs of a lift-off, according to Istat's latest report on the Italian economy. We also noted a report in Corriere della Sera this morning that Pier Carlo Padoan is considering cuts in income taxes and corporate taxes ahead of the elections.

Show Comments Write a Comment

June 08, 2016

A critique of Germany's Turkey policy

Asli Aydintasbas of the European Council on Foreign Relations has a very good article in which he criticises Germany duplicity - the brave declaration by the Bundestag on the Turkish genocide of Armenian in 1915, and Angela Merkel's policy of coddling a dictator today. He notes that

"EU officials uttered not a peep on press freedoms, the pressures on the judiciary or the dire human-rights situation in Kurdish areas, until the European public finally protested the double standard. The German government is courageous to face its past, but what it should also question is its policy of omertà about the present. Turkish democrats have grown deeply suspicious of Berlin’s politicking over the past year, seeing their struggles ignored for the sake of a handshake on migrants. The vote on history won’t change that."

Show Comments Write a Comment

This is the public section of the Eurointelligence Professional Briefing, which focuses on the geopolitical aspects of our news coverage. It appears daily at 2pm CET. The full briefing, which appears at 9am CET, is only available to subscribers. Please click here for a free trial, and here for the Eurointelligence home page.

 

Recent News

  • December 01, 2017
  • Unemployment insurance for all - nice idea, but does it work?
  • Hard border paradox
  • Could Jeremy Corbyn be the politician to defeat the banks?
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • November 17, 2017
  • Germany's climate change hypocrisy
  • Canada minus the plus
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • November 02, 2017
  • The Impact of Brexit
  • German court of auditors questions diesel tax break
  • On trade and violence
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • October 18, 2017
  • Veneto and Lombardy to vote on autonomy
  • Portugal's president calls on government over fires
  • Radical ideas for radical times: how to pay off public debt
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • October 03, 2017
  • A short note about UK politics
  • The impact of the German elections on the euro debate
  • The decline and fall of Martin Schulz and the SPD
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • September 18, 2017
  • Why Germany cannot lead Europe, let alone the free world
  • Will Macron help to build up Mélenchon?
  • Boris' Coup
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • September 01, 2017
  • Rutte deflates Dutch labour party like a hot air balloon
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • August 21, 2017
  • Soft, getting softer
  • Tsipras' chances of a boost
  • On the fallacy of a middle-ground option for the eurozone
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • July 28, 2017
  • German government bans Porsche Cayenne
  • More troubles for the AfD
  • Of course there will be a soft transitional period for the UK
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • July 10, 2017
  • EU in self-destruction mode
  • The EU's fault lines
  • Fake News and Fake views
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • June 21, 2017
  • Why has the SPD deflated?
  • Berlusconi’s strategy
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • June 01, 2017
  • On how to fix the eurozone
  • What happens if there is no Article 50 agreement?
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • May 11, 2017
  • Germany rejects IMF’s policy recommendations before they are issued
  • Why Labour is losing
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • April 20, 2017
  • Don’t bet on Trump turning globalist
  • A note on UK election polls
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • March 27, 2017
  • Governing formation troubles - Northern Ireland edition
  • Did Trump present Merkel with a bill for Nato?
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • January 08, 2018
  • Getting real on Brexit
  • Macron in China
  • March 02, 2017
  • Juncker's scenarios for Europe
  • EU minimum wages are rising
  • No, the Lords didn’t stop Brexit
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • November 15, 2017
  • A Christmas bonus for poor Greeks
  • Dim prospects of negotiated de-escalation on Catalonia
  • Macron's favourite to succeed Juncker - first round
  • On sovereignty
  • Gli Azzurri
  • February 03, 2017
  • The Schulz effect is getting huge
  • The post-Brexit boom goes on and on and on
  • A correction on Catalonia
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • September 18, 2017
  • Why Germany cannot lead Europe, let alone the free world
  • Will Macron help to build up Mélenchon?
  • Boris' Coup
  • January 05, 2017
  • French Socialist primaries - old wine in new bottles
  • Le Pen's hard ecu
  • Will Tusk get a second mandate?
  • Themes of 2017
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • July 10, 2017
  • EU in self-destruction mode
  • The EU's fault lines
  • Fake News and Fake views
  • December 01, 2016
  • Will Italian expats swing the referendum result?
  • Why we keep on misreading the polls
  • Si vis pactum, para bellum
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • October 23, 2017
  • Macron's plans for the European Parliament
  • First phase of Brexit negotiations in final stretch
  • Why the left hates Europe
  • April 23, 2017
  • The demise of the AfD has accelerated dramatically
  • On how France will need to confront Germany
  • October 24, 2016
  • Ceta - the next deadline
  • Who will lead Germany?
  • Peasant party upsets Lithuanian election
  • Ségolène Royal, seriously?
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • September 22, 2017
  • The last German polls
  • May 15, 2017
  • SPD and CDU disagree on how to respond to Macron
  • Was Rajoy blackmailed?
  • The rise of the re-leavers
  • January 05, 2017
  • French Socialist primaries - old wine in new bottles
  • Le Pen's hard ecu
  • Will Tusk get a second mandate?
  • Themes of 2017
  • August 30, 2016
  • Brexit facts on the ground
  • Burkinis and Republican primaries
  • The SPD and TTIP
  • April 25, 2016
  • The death of the Grand Coalition
  • Insurrection against TTIP
  • Juppé to benefit from Macron hype
  • On optimal currency areas
  • Why the Artic region could be the next geopolitical troublespot
  • From a currency to a people
  • December 21, 2017
  • Catalonia votes
  • A deputy prime minister resigns
  • Will Gibraltar result in another Irish fudge?
  • Blood, sweat and tears
  • November 20, 2017
  • Showdown over Northern Ireland
  • Castaner and his list confirmed
  • Gennimata to lead the new left alliance
  • Brexit‘s ultimate irony
  • October 19, 2017
  • Germany is softening up over Brexit
  • The French budget and the wealthy
  • Will Borut Pahor win re-election as Slovenian president?
  • September 19, 2017
  • German populist vote - as seen from the outside
  • May's total Brexit power grab
  • August 21, 2017
  • Soft, getting softer
  • Tsipras' chances of a boost
  • On the fallacy of a middle-ground option for the eurozone
  • July 10, 2017
  • EU in self-destruction mode
  • The EU's fault lines
  • Fake News and Fake views
  • June 12, 2017
  • Not strong perhaps, but stable
  • Catalan independence, a mental state
  • May 18, 2017
  • German hard line on Brexit already cracking
  • Spanish parliament rebukes justice minister
  • Kenny's resignation and the likelihood of new elections
  • Getting real about fiscal union
  • April 23, 2017
  • The demise of the AfD has accelerated dramatically
  • On how France will need to confront Germany
  • March 30, 2017
  • How strong is support for Macron, really?
  • Last meeting of a grand coalition
  • The unspectacular departure of an MP
  • March 07, 2017
  • Dinner in Versailles
  • The shape of Brexit financial migration
  • February 14, 2017
  • Elites vs underdogs - French edition
  • A rock on the road to Brexit
  • A short note on politicised forecasting
  • January 25, 2017
  • Good news for the British government
  • January 05, 2017
  • French Socialist primaries - old wine in new bottles
  • Le Pen's hard ecu
  • Will Tusk get a second mandate?
  • Themes of 2017
  • December 09, 2016
  • Why Five Star will gain
  • Ukip to target pro-Remain MPs in Brexit constituencies
  • Rutte plays tough on Ukraine
  • November 21, 2016
  • Merkel IV
  • Erdogan increasingly alienated from the West
  • EU may force a hard Brexit
  • The day after
  • November 02, 2016
  • How not to address the rise in populism
  • German Social Democrats - the defenders of Putin's interests
  • October 18, 2016
  • The self-destruction of Francois Hollande
  • Brexit psychotherapy
  • At least three candidates for the PvdA leadership
  • The unbelievable hypocrisy of Mario Monti
  • October 03, 2016
  • Hard, harder, hardest
  • PSOE cuts its nose to spite its face
  • In defence of Jeremy Corbyn
  • September 19, 2016
  • Unhappy in Bratislava
  • Au nom du peuple
  • Pressure rising towards a hard Brexit
  • September 06, 2016
  • Eliminating the impossible
  • Merkel-Dämmerung
  • August 26, 2016
  • Will the refugee crisis return?
  • Montebourg en avant
  • Moisi on Sarkozy's chances
  • Binary choices
  • August 15, 2016
  • Sarkozy to declare his candidacy
  • Do intra-eurozone current account deficits matter?
  • On the failures of modern macroeconomics
  • July 22, 2016
  • The Brexit compromise
  • EU concerned about Turkish state of emergency
  • July 13, 2016
  • Brexit could take six years to complete
  • Macron - a modern Brutus?
  • The failings of Steinmeier
  • July 05, 2016
  • May vs Leadsom
  • The Greek election reform gamble
  • On Article 50
  • Valls threatens to stop applying EU directive on foreign workers
  • On the EU's bleak geopolitical position
  • June 28, 2016
  • Towards a new North Sea Alliance
  • And what about the eurozone?
  • Sarkozy favours French referendum to rebuild EU
  • June 22, 2016
  • Still too close to call
  • What will the PSOE do?
  • Is Renzi changing his mind on the referendum?
  • French politics and CGT protests
  • June 17, 2016
  • Group 53 marks its difference from Tsipras
  • Polls see Mélenchon ahead of Hollande
  • Why is nobody listening to economists?
  • June 13, 2016
  • Civil protest against Syriza
  • Protests over labour French labour law continue
  • Spain's politial realignment
  • Duff on Turkey
  • June 10, 2016
  • What after Brexit?
  • The decisive battle of the French left
  • A new era of Italian politics
  • June 09, 2016
  • Greens threaten to block German asylum law
  • The escalating Turkish problem
  • Conspiracy theories in Austria
  • Why Leave means Leave
  • June 08, 2016
  • Getting real on debt relief
  • The re-alignment of the Italian right
  • A critique of Germany's Turkey policy