EU austerity policies risk civil war in Greece, warns top German economist Dr Sinn
Greece’s austerity measures cannot prevent default and will lead to a breakdown of the political order if continued for long, a leading German economist has warned.
By Ambrose Evans-Pritchard in Cernobbio, Italy
Published: 9:30PM BST 03 Sep 2010
65 Comments
EU austerity polices risk civil war in Greece, warns top German economist Dr Sinn
Hans-Werner Sinn, head of Germany's prestigious IFO Institute, said it was impossible to cut wages and prices by 30pc without major riots.
“This tragedy does not have a solution,” said Hans-Werner Sinn, head of the prestigious IFO Institute in Munich.
“The policy of forced 'internal devaluation', deflation, and depression could risk driving Greece to the edge of a civil war. It is impossible to cut wages and prices by 30pc without major riots,” he said, speaking at the elite European House Ambrosetti forum at Lake Como.
“Greece would have been bankrupt without the rescue measures. All the alternatives are terrible but the least terrible is for the country to get out of the eurozone, even if this kills the Greek banks,” he said.
Dr Sinn said Greece is an entirely different case from Spain and Portugal, which still have manageable public debts and can bring their public finances back into line with higher taxes.
“Greece would have defaulted in the period between April 28 and May 7, had the money not been promised by the European Union,” he said, describing the failure of the EU’s bail-out strategy to include a haircut for the banks as an invitation to moral hazard.
“There should be a quasi-insolvency procedure for countries. Creditors have to accept a haircut before any money flows for rescue plans, otherwise we’ll never have debt discipline in the eurozone,” he said.
Greek society has so far held together well, despite a wave of strikes and street violence in the early months of the crisis. However, unemployment is rising fast and political fatigue with such austerity policies typically sets in the second year.
Under the rescue deal, the eurozone pledged €80bn of new loans at 5pc interest and the International Monetary Fund offered a further €30bn.
The joint bail-out was hoped to safeguard Greece against the pressure from global capital markets for two and half years, but the relief rally proved short. Spreads on longer-term Greek government debt have surged back to crisis levels of about 800 basis points, implying a high risk of default.
“We are in the second Greek crisis right now, today,” said Dr Sinn.
Greece is undergoing what amounts to an IMF austerity package but without the IMF cure of debt restructuring or devaluation that usual for a country with a spiralling public debt and a chronic loss of competitiveness.
The IMF says Greece’s debt will rise to 150pc by 2013-2014 even if Athens complies fully, a strategy viewed as self-defeating by several ex-IMF officials.
There is a strong suspicion that the real objective is to bail-out North European banks with heavy exposure to Southern Europe, rather help Greece.Dr Sinn said the Germany is now was super-competitive after clawing back 18pc in competitiveness during its long slump. “We’re in a new phase of history. The toggle switch has turned and we are going to see a mirror image of the last 15 years. This time it is Germany that will have an internal boom,” he said.
Germans will not recyle their savings in the Club Med region. They will invest at home.
http://www.telegraph.co.uk/finance/economics/7980291/EU-austerity-policies-risk-civil-war-in-Greece-warns-top-German-economist-Dr-Sinn.htmlêáé áõôü
http://www.bankingnews.gr/bank-insider/item/5607-%CF%84%CE%B9-%CF%80%CF%81%CE%BF%CE%B5%CE%BE%CE%BF%CF%86%CE%BB%CE%BF%CF%8D%CE%BD-%CF%84%CE%B1-spread-%CE%B3%CE%B9%CE%B1%CF%84%CE%AF-%CE%B4%CE%B5%CE%BD-%CF%80%CE%AD%CF%86%CF%84%CE%BF%CF%85%CE%BDÔé ðñïåîïöëïýí ôá åëëçíéêÜ spread; Ãéáôß äåí ðÝöôïõí;
04/09/10 - 07:47
Ç óõììåôï÷Þ ôçò ÅëëÜäáò óôçí Åõñþðç, ç åíåñãïðïßçóç ôïõ ìç÷áíéóìïý óôÞñéîçò êáé ïé ðñïóðÜèåéåò ôçò åëëçíéêÞò êõâÝñíçóçò ôåëéêÜ üðùò öáßíåôáé äåí ðáñÝ÷åé ðëÝïí áõôüìáôá åããýçóç åîùôåñéêÞò ÷ñçìáôïäüôçóçò ìå ÷áìçëü êüóôïò ãéá ôç ÷þñáò ìáò. Ôï spread ôïõ åëëçíéêïý ïìïëüãïõ åîáêïëïõèåß íá êáôáãñÜöåé õøçëÝò «ðôÞóåéò» áíáæùðõñþíïíôáò ôá óåíÜñéá ôçò ÅëëÜäáò ãéá áíáðüöåõêôç ÷ñåïêïðßá.
Ôï Óõìâïýëéï Åîùôåñéêþí Ó÷Ýóåùí (Council on Foreign Relations) ôùí ÇÐÁ Ýäùóå óôç äçìïóéüôçôá ìßá óýíôïìç Ýêèåóç üðïõ áíáëýåôáé ôï ðñüâëçìá ôçò ÅëëÜäáò, åñìçíåýïíôáò êáôÜ áõôüí ôïí ôñüðï êáé ôçí ðáñáìïíÞ ôïõ spread óå õøçëÜ åðßðåäá.
¼ðùò ÷áñáêôçñéóôéêÜ áíáöÝñåôáé ôá åðßðåäá ôïõ åëëçíéêïý spread ðáñáìÝíïõí ó÷åäüí ôá ßäéá üðùò Þôáí ðñéí ôçí åíåñãïðïßçóç ôïõ ìç÷áíéóìïý, üôáí ç ÅëëÜäá âñéóêüôáí óå «êáôÜóôáóç çìé-÷ñåïêïðßáò» (eve of the Greek semi-default), ìåôÜ ôçí áíáêïßíùóç ôçò Ýíôáîçò óôï ìç÷áíéóìü, áëëÜ êáé ôþñá ôï ÓåðôÝìâñéï ìåôÜ äçëáäÞ áðü ôéò èåôéêÝò åêèÝóåéò ôçò Êïìéóéüí êáé ôïõ ÄÍÔ.
Óýìöùíá ìå ôï CFR, ç ÅëëÜäá ôåëéêÜ èá áöåèåß óôçí ÷ñåïêïðßá, ìüëéò ôá åëëçíéêÜ ïìüëïãá äå èá êáôáëáìâÜíïõí ìåãÜëï ìÝñïò ôùí ÷áñôïöõëáêßùí ôùí åõñùðáúêþí ôñáðåæþí. ÁõôÞ ç õðüèåóç ðñïûðïèÝôåé äýï ðñÜãìáôá: Íá áðïäåóìåõôïýí áðü ôï åëëçíéêü ÷ñÝïò ïé ôñÜðåæåò ôçò åõñùðáúêÞò ðåñéöÝñåéáò, ç Ýêèåóç ôùí ïðïßùí åßíáé ðïëý ìåãÜëç, êáé üôé üëïé ïé Åõñùðáßïé óôï ôÝëïò èá èÝëïõí íá «áðïâÜëëïõí» ôï åõñþ, ìåôÜ ôéò ïäõíçñÝò óõíÝðåéåò åíäå÷üìåíçò åëëçíéêÞò ÷ñåïêïðßáò.
Ôï CFR ðñïåéäïðïéåß üôé åÜí èÝëïõí ïé åðåíäõôÝò íá êáôáëÜâïõí ôé áêñéâþò èá óõìâåß èá ðñÝðåé íá ðáñáêïëïõèïýí óôåíÜ ôï åëëçíéêü spread ôéò åðüìåíåò åâäïìÜäåò.
Ôï ßäéï õðïóôçñßæåé êáé ç Goldman Sachs óå ðñüóöáôç Ýêèåóç ôçò, ç ïðïßá ìÜëéóôá åðéóçìáßíåé ÷áñáêôçñéóôéêÜ üôé åÜí åß÷áí ôçí åðéëïãÞ ôçò ÷ñåïêïðßáò Þ ìç ôçò ÅëëÜäáò ïé Âüñåéïé åôáßñïé ôçò, èá åðÝëåãáí ôï äåýôåñï ìüëéò ïé ôñÜðåæåò «îåöïñôþíïíôáí» ôá åëëçíéêÜ ïìüëïãá. Áõôü Üëëùóôå ðñïåîïöëïýí êáé ïé áãïñÝò, ìå ôïõò èåóìéêïýò íá åðéëÝãïõí ôç ëýóç ôçò áðåìðëïêÞò áðü ôï åëëçíéêü ÷ñÝïò.
Ìå ôçí ïéêïíïìéêÞ äñáóôçñéüôçôá óôçí ÅëëÜäá íá ìåéþíåôáé ñáãäáßá êáé ìå ôá Ýóïäá ôïõ ðñïûðïëïãéóìïý íá õóôåñïýí äñáóôéêÜ ôùí ðñïâëÝøåùí, ç êõâÝñíçóç äåí èá ìðïñÝóåé íá âñåé ôïõò ðüñïõò ãéá íá êáëýøåé ôéò áíåëáóôéêÝò äáðÜíåò ôçò, åðéóçìáßíïõí ïé áíáëõôÝò, ðñïóèÝôïíôáò üôé âÝâáéá ôá spreads áõîÜíïíôáé êáé ãéá ôïí ðñüóèåôï ëüãï üôé êÜèå óôïé÷åßï ðïõ áíáêïéíþíåôáé ãéá ôçí åëëçíéêÞ ïéêïíïìßá áíáëýåôáé êáôÜ ôÝôïéï ôñüðï þóôå íá áðïäåé÷èåß áõôü ðïõ Þäç Ý÷åé ãßíåé áðïäåêôü åã÷ùñßùò êáé äéåèíþò, üôé äçëáäÞ ç åëëçíéêÞ ïéêïíïìßá êáôáññÝåé.
Äéáêýìáíóç åëëçíéêïý spread 1/4-1/9
1-Áðñ 345
3-Ìáú 543
7-Ìáú 965
1-Éïõí 517
1-Éïõë 770
1-Áõã 749
1-Óåð 910
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