Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Tag Archives: European Central Bank

The Eurozone Continues to Unravel

CONSTANTINE PALACE, STRELNA. Italian Prime Min...

With Greece’s Prime Minister George Papandreou agreeing to step down in order to secure more bailout funds from the ECB, attention turned immediately to Italy’s financial problems that dwarf those of Greece’s. The Greek PM’s decision now clears the way for an interim government to agree formally to the new austerity measures demanded by the European Union as a condition of receiving additional financing by the end of the month. Those funds are needed to pay Greece’s bills through January 2012.

The bond market shifted its attention to Italy on Monday, driving interest rates on its 10-year bond to a record-high 6.66 percent, the highest since the country entered the union in 1999 and perilously close to

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Greek PM Throws Monkey Wrench into Eurozone “Deal”

George Papandreou

Prime Minister George Papandreou’s surprise call for a referendum on the new austerity measures demanded by last week’s eurozone “deal” caught everyone off guard, including his own finance minister. Analysts immediately accused Papandreou of seeking political cover for the increasingly unpopular increased austerity measures to be imposed as a condition for the next insertion of funds from the International Monetary Fund (IMF) in two weeks. Knowing that citizens would likely vote against the measures if given the chance, the PM could then pass the blame for failure onto the citizens, leaving himself and his party, the Panhellenic Socialist Movement (PASOK), absolved from blame as the new measures failed.

With polls showing 60 percent of the populace opposed to further measures, George Kristos, a political analyst, said that

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Greece “Fixed,” Portugal Next Up in Eurozone Crisis

Portugal flag

If the decline in the Portuguese money supply for September is annualized, it will shrink by more than 20 percent, presaging more economic difficulties for a country already reeling from austerity measures imposed by the European Union. Measures of money supply are watched carefully by economists as a portent for economic behavior over the coming six to 12 months.

With an economy already suffering from 12-percent unemployment, a debt-to-GDP ratio approaching an astonishing 360 percent, and the yield on the country’s 10-year treasury debt exceeding 12 percent, it won’t take much to send the Prime Minister, Pedro Passos Coelho, scurrying to the European Central Bank (ECB), hat in hand, for more help.

In fact Portugal’s economy may already have gone over the edge. Simon Ward, economist with Henderson Global Investors, said that

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The Euro “Deal” Raises More Questions than it Answers

European Council President Herman Van Rompuy m...

Following the Eurozone summit meeting in Brussels, European Council President Herman Van Rompuy announced the results of the late-night negotiations: “From a series of national debt crises, the situation was evolving into a systemic concern, threatening the stability of the Eurozone as a whole. This threat has been contained.”

First, the holders of Greek sovereign debt have voluntarily agreed to accept a write-down of their holdings by 50 percent which would be sufficient, he said, to bring down Greece’s debt-to-GDP ratio from its current level of 150 percent to 120 percent by the year 2012.

Second, in exchange for additional austerity measures, Greece will

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Moody’s Warns of Possible French Debt Downgrade

Official logo of the French Republic, used exc...

Moody’s annual report on France’s finances appeared on Monday, its summary sufficiently couched in calm and reasoned tones that the markets took little notice: “The country’s AAA rating with a stable outlook reflects the French economy’s strength, the robustness of its institutions and very high financial strength.”

Further on in the report, however, ominous phrases began appearing, such as

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Germany Sets Stage for Euro-Style TARP

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Image by _Harry Lime_ via Flickr

Last week, the German parliament voted overwhelmingly, 523-85, to increase the size of the European Financial Stability Fund (EFSF) from $335 billion to $600 billion, and to allow it to purchase sovereign bonds, lend to profligate governments, and strengthen banks hurt by holding risky government debt.

Protests over the move came primarily from Wolfgang Bosbach, a member of Chancellor Angela Merkel’s own party and an initial supporter of the European Union. He pointed to the failure of the continuing Greek bailouts, observing, “The first medicine didn’t work, and now we are simply doubling the dose. My fear is that when the big bang happens, it won’t just be us who will have to pay for generations hereafter.” He still favors the union, however: “I don’t want to be co-opted into an anti-euro movement—the EU is an important political project. But what we promised the people was a union of stability, not a union of debt.”

Bosbach reflects increasing discontent of German citizens who find themselves forced to

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Greek Prime Minister’s Promises Ring Hollow

George Papandreou, President of PASOK.

Image via Wikipedia

Prime Minister George Papandreou’s speech on Saturday evening in Thessaloniki was designed to reassure not only his Greek citizens that all would be well but also that those holding Greek sovereign debt would be getting their money back. The government’s top priority, he said, is “to save the country from bankruptcy.”

Said Papandreou: “We have taken the decision to fight to avoid a catastrophe for our country and its citizens: bankruptcy. We will remain in the Euro. And this meant and means difficult decisions…. If this year

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Greek Austerity, Privatization Programs Won’t Be Enough

George Papandreou

Image by Parti socialiste via Flickr

In its efforts to avoid restructuring (i.e., defaulting on) its debt, Greece announced the sale of some of its assets to raise funds and to satisfy the austerity requirements imposed on the country last March. It is trying to raise $70 billion by 2015. Its efforts won’t be nearly enough.

For sale is the country’s 1/6th interest in OTE, Europe’s largest telecom company, its one-third interest in the Post Savings Bank, all of its interest in the country’s two largest port operators. It will also reduce its ownership shares significantly in

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Greece is Out of Options

Greek Flag

Image by Rupert Brun via Flickr

Writers for The Wall Street Journal’s lead article on Tuesday expressed surprise that Greece’s fiscal problems are “coming to the boil once more.” After all, when Greece went hat in hand to members of the eurozone last year, they were able to secure a $158 billion bailout whose strings attached required severe austerity measures on the Greek citizens to resolve the matter. The matter has obviously not been resolved, and Greece is back to the table, asking for more assistance. This time it’s a much tougher sell.

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Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.