Amagni

We are still writing on the Insomniacs 2 but we focus more on the Dogma and Geopolitics group created by our friend Carina with many friend authors and with great posts. Please follow,thanks

Against any dogma but for Humanity

Early music ensemble “Flauto dolce” aka “Joculatores” Belgrade, Serbia
Live performance at San Francesco church in Ravenna, Italy, during the festival “Settembre Dantesco”,
done on September 13th 2009. Festival was organized by Ravenna Municipality – Department of culture,
Classense library Ravenna, Dante’s opera Ravenna & Fondation “Del Monte” Ravenna

we really do not care where you come from. We do care where you wanna go 🙂

 

Greece: What's at stake in the election

Greek voters will have a second chance Sunday to elect a government that can hopefully pull the nation back from the brink. (Voting closes in less than two hours now that I post this )

The repeat of last month’s inconclusive Parliamentary election comes as European Union policymakers are struggling to prevent the crisis from spreading to Spain and Italy.

“We are dealing with the serious risk that the eurozone will fall apart,” said Nicholas Spiro, managing director of London-based consultancy Spiro Sovereign Strategy. “And Greece is the trigger.”

While the Greek economy is small, the fear is that continued political turmoil there could result in Greece exiting the euro currency union. That could drag down other fragile euro area nations and shock the financial system at a time when the global economy is weak.

Greece has been without a fully functioning government since May 6, when voters last went to the polls. After the three main parties all failed to form a coalition government, a second election was called for June 17.
Greeks: How is the debt crisis playing out in your life?

The concern is that Sunday’s election will play out like the last one, leaving Greece with a weak caretaker government at a time when the nation needs clear leadership.

Greece must identify additional budget cuts by the end of June to be considered ‘compliant’ with the terms of its bailout program. If it fails to do so, analysts say the European Central Bank could cut off funding to Greek banks, which have already been drained of cash as deposits flee the country.

In addition, Greece is facing a €3.9 billion bond redemption in August, which it could struggle to pay if there is still no government in place by then.

The Greek economy is in deep decline and analysts say Athens is in danger of running out of the money it needs to pay for basic necessities, such as fuel and medical supplies.

“They clearly don’t have the cash to cover basic services,” said Spiro. “The country is bankrupt.”

Syriza, the radical left-wing party, came in second in the last election as voters skewed toward politicians who oppose more austerity. Syriza’s leader, Alexis Tsipras, has threatened to renege on the terms of Greece’s bailout, but he has also expressed a desire to remain in the euro currency union.

The moderate New Democracy party and the Socialist Pasok party were punished by voters for supporting the bailout program, and agreeing to the austerity measures that came with it.

There was a ban on polls in the run up to the vote, but surveys taken last month showed a tight race between Syriza and New Democracy.

The election is being framed as a potential catalyst for Greece to exit the euro zone. But none of the main political parties is eager to see that happen, since returning to the drachma would have severe and unknowable consequences for Greece.

“No political party from the left or the right will risk taking the country out of the eurozone,” said Dimitri Papadimitriou, a professor of economics at Bard College.

Jose Barroso, president of the European Commission, said Wednesday that he wants Greece to stay in the euro area “assuming it will respect its commitments.” But he criticized European leaders for underestimating the depth of the crisis in the eurozone.

“We have a systemic problem and we need to articulate the vision of where we need to go,” Barroso told the European Parliament. “I am not sure whether the urgency of this is fully understood.”

While the outcome is impossible to predict, analysts say any government that comes to power will seek to renegotiate the terms of Greece’s bailout. And there are signs that Germany and other fiscal hawks will be willing to make concessions, given the fragility of Spain and Italy.

“The finishing touches are being placed on a package of concessions to Greece’s second bailout that will be discussed with any incoming government, assuming one is formed and irrespective of what it looks like,” said Mujtaba Rahman, an analyst at political research firm Eurasia Group.

In a research report, Rahman wrote that in the unlikely event that no government is formed, EU policymakers have a number of options to deal with Greece’s upcoming €3.9 billion bond redemption in August. For example, he pointed to the €35 billion that was provided to the ECB as part of Greece’s debt restructuring.

“In the context of an inconclusive result, some workaround for the bond redemption would be agreed,” said Rahman.

Meanwhile, the uncertain situation in Greece could have serious repercussions for other troubled euro area economies.

Spain is under renewed market pressure after Madrid requested up to €100 billion from the EU bailout fund to recapitalize insolvent banks.

Investors have also set their sights on Italy, driving up the nations borrowing costs amid fears the crisis is spreading to the core of the eurozone.

“It’s quite clear this is spreading,” said Jennifer McKeown, senior European economist at Capital Economics. “Spain’s bailout is at least encouraging, but I hope they will put something together for Italy as well.”

Source

What if?

There is more and more speculation that Greece is about to leave the euro. The country has been unable to form a government, and new elections seem set to give power to parties that reject the spending cuts that have been agreed with other eurozone governments and the International Monetary Fund.
But without those spending cuts, the Greek government will receive no more bailout loans, it won’t have the money to pay its debts, the Greek banks will probably go bust, and the European Central Bank may be forced to cut Greece loose from the single currency. What would this mean for Greece and the rest of Europe?

Sovereign debt crisis

Sovereign debt is the money a government borrows from its own citizens or from investors around the world. But if Greece leaves the eurozone, setting a precedent that such a thing can happen, then investors will become very nervous about lending to other struggling eurozone countries.

This could leave the governments of Spain and Italy short of money and in need of a bailout. These two huge countries together account for 28% of the eurozone’s total economy, but the EU’s bailout fund currently doesn’t have enough money to prop both of them up. Even France’s government could get into trouble if it needed to bail out its enormous banking sector.

Political backlash
As eurozone governments and the European Central Bank face enormous losses on the loans they gave to Greece, public opinion in Germany may turn against providing the even larger bailouts probably now needed by big countries like Italy and Spain. The ECB’s role of quietly providing rescue loans to these countries in recent months would be exposed and could become politically explosive, making it harder for the ECB to continue to prop up their economies.
However, the threat of a meltdown might push Europe’s or the eurozone’s governments to agree a comprehensive solution – either dissolution of the single currency, or more integration, perhaps through a democratically-elected European presidency tasked with overseeing a massive round of bank rescues, government guarantees and growth-stimulating infrastructure investment.

Market turmoil

Nervous investors and lenders around the world may start selling off risky investments and move their money into safe havens. Stock markets may plunge. High-risk borrowers could face sharply higher borrowing costs, if they can borrow at all.

Meanwhile, safe investments such as the dollar, the yen, the Swiss franc, gold and perhaps even the pound would rise, while safe governments such as those of the US, Japan, Germany and even the UK could borrow more cheaply. And it’s not all bad news – the oil price may well fall sharply.

Recession

Crisis-stricken eurozone banks may be forced to slash their lending. Businesses, afraid for the euro’s future, may cut investment. Faced with a barrage of bad news in the press, ordinary people may cut back their own spending. All of this could push the eurozone into a deep recession.

The euro would lose value in the currency markets, providing some relief for the eurozone by making its exports more competitive in international trade. But the flipside is that the rest of the world will become less competitive – especially the US, UK and Japan – undermining their own weak economies. Even China, whose economy is already slowing sharply, could be pushed into a recession

Source

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etc…My opinion is that Greece really needs to exit EZ