MidnightWatcher's Blogspot

By Patrick Cockburn – “Greece is expecting to agree the terms of European leaders for a rescue package this evening as the country seeks to avoid a default on its international debts. But Greeks fear that the cuts, imposed on them in return for a €130bn bailout, is sending the country spiralling into a catastrophic depression.

The deal was to be considered by eurozone Finance Ministers in a conference call tonight, but final agreement has been once more postponed until next week while European leaders review the credibility of Greek party leaders’ promises that there will be no back-sliding on the terms.

‘The country is on a knife’s edge,’ said Finance Minister Evangelos Venizelos as party leaders signed a pledge to implement the agreement that will inevitably deepen Greece’s depression. The conservative leader Antonis Samaras, who is likely to be the next prime minister of Greece after an election, today reluctantly signed a letter committing him to cuts in wages, pensions, jobs and state expenditure…

The mood in Athens is a mixture of fatalism and gloom.” Read more.

Greek economy spirals down as EU forces final catharsis that may plunge country towards anarchy – “The escalating brinkmanship came as fresh data showed that Greece’s economy contracted by 6.8pc last year and at an accelerating 7pc rate in the last quarter, far worse than expected by the European Union (EU), the European Central Bank (ECB) and the International Monetary Fund (IMF) “troika”. The country appears to be in a self-feeding downward spiral that is playing havoc with budget targets, leaving Greece with a Sisyphean task of ever deeper cuts… Blackened buildings set alight by protesters on Sunday were cordoned off on streets around parliament in Syntagma Square, a vivid reminder to Greece’s politicians that any misjudgment could push the country towards anarchy.” Read more.

Flashback: ‘Perfect Storm’: In Case You Still Don’t Get It, Here’s Why A Greek Default Should Put ‘Fear In Your Heart’ – “Economists and investors see a Greek default as the biggest test of the world financial system since the crisis that followed the collapse of Lehman Brothers investment house in 2008… A breakdown in talks could trigger steep losses in stock markets in Europe and the U.S. Just as in 2008, banks could stop lending to each other, and the credit freeze could cause a market panic. More importantly overseas, it could cause borrowing rates for Portugal and Italy to jump, pushing those much larger countries closer to defaults of their own. That’s only the beginning…” Read more.