Όλες οι κατηγορίες:

Φανή Πεταλίδου
Ιδρύτρια της Πρωινής
΄Έτος Ίδρυσης 1977
ΑρχικήEnglishPolitical, Not Financial, Pressure Poses The Greatest Risk to the Euro

Political, Not Financial, Pressure Poses The Greatest Risk to the Euro

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By Laurie Laird, Forbes

It was as sizzling February for the Greek financial markets. In the month preceding the expiration of the bailout agreement keeping the country afloat, the Athens Stock Exchange General Index jumped by 20%, while the yield on the government’s three-year notes plunged to just over 12%, from more than 19% in late January.

Yet the four-month extension plan agreed by Greece and its international lenders may not take effect until late April. That raises rather troubling questions over Greece’s ability to pay debts falling due in March. Analysts at Nomura believe that Greece could run out of cash during the first half of the month.

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The complacency of the markets may reflect the fact that, unlike the earlier installment of the Greek financial crisis in 2012, international institutions are holding the lion’s share of Greek debt. Private banks and investment funds are significantly less exposed to a Greek meltdown than they were three years ago.

But the future of European economic integration is far from assured. In 2015, the pressure on the euro zone is political. That may prevent a sudden implosion of the single currency. But the popular loss of faith in the currency, and in the institutions charged with maintaining its stability, makes the euro’s survival as uncertain as ever.

Shortly before proclaiming Greek reform proposals a reasonable starting point for negotiations on a bailout extension on February 24, Eurogroup leader Jeroen Dijsselbloem lamented the difficulty in imposing structural reforms on member states. That sounds a bit like a plea for deeper political integration. And it’s exactly what the Greeks voted against when electing the far-left, anti-austerity Syriza party into office in late January.

Greece has already backtracked on crucial commitments contained in that agreement – not least a pledge to continue with the privatization of state assets. That may be the price of political survival. Greeks are exhausted by six years of austerity, during which the economy contracted by more than a quarter . Unemployment plagues 26% of the work force. Charismatic though he may be, Prime Minister Alex Tsipras faces an immense challenge in selling the plan agreed last week to voters who asked him to do something very different.

It’s not just Greece where voters are voicing their discontent with economic restraint dictated from the European Commission in Brussels and the European Central Bank in Frankfurt. The Spanish Podemos party has modelled itself on Syriza – and is outpolling the mainstream parties of the centre left and centre right. Spaniards will vote in a national election by year-end.

In France, the ruling Socialist party was forced to resort to executive order to pass a structural reform package earlier in February, after failing to gain sufficient parliamentary support for the plan. That legislation was aimed at staving off financial sanctions from the European Commission, which had threatened to fine France for failing to bring its budget deficit below 3% of gross domestic product.

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Anti-EU sentiment may be at its highest in Britain – not even a member of the euro zone. The upstart Ukip Party commands only two seats in parliament, but its nationalist rhetoric appeals to the British public, forcing Conservative Prime Minister David Cameron to pledge a referendum on EU membership should his party prevail in a general election due in May.

The bond markets vigilantes may have turned their sights away from Greece, at least for the short-term. But national electorates may begin to take aim at the European economic integration project.

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