Free Republic

Reports claimed the government was prepared to reduce at least three different VAT rates to one, and limit exemptions. Prime minister Alexis Tsipras had opposed the move, claiming that the change would hit poorer people. The country will also press-on with privatisations it had also previously vowed to block, according to reports. However, Syriza has said that demands by creditors to reverse an increase in the minimum wage and cut pensions remain "red lines" that the leftist leadership is unwilling to cross... Mr Sakellaridis said that failure to reach an "honest compromise" with creditors would most likely lead to a...

On Thursday morning, we took an in-depth look at what the progression of events is likely to be in the event a cash-strapped, negotiation-weary Greece finally, for lack of will or for lack of options, fails to scrape together enough cash to pay its creditors. As BofAML notes, a missed IMF payment and/or failure to make interest payments to either the ECB or private creditors over the coming weeks would likely lead to default within 30 days, at which point "mark-to-fantasy" becomes mark-to-market and then "mark-to-default" in very short order. Although Greek officials came out midday with a “categorical” denial...

In an interview with Spiegel, celebrated French economist Thomas Piketty speaks about Alexis Tsipras’ election victory in Greece, Europe’s inability to fix its financial woes and what EU leaders can learn from the United States. […] “We may have a common currency for 19 countries, but each of these countries has a different tax system, and fiscal policy was never harmonized in Europe. It can’t work. In creating the eurozone, we have created a monster.” […] “We need a fiscal union and a harmonization of budgets. We need a common debt repayment fund for the eurozone, like the one proposed...

Brussels- European leaders agreed on Friday to extend Greece's bailout for four months after weeks of terse negotiations.

Once again the crisis in Greece is threatening the unity of the entire euro zone. Many analysts are asking what must be done to restore viability to the Union's weakest link. Lost in this discussion is that modern Greece, formed in 1830, has never really been required to stand on its own. Generations of support from abroad, typically given for strategic reasons, has created a false sense of prosperity in the country and has prevented the Greeks from accepting the realities of their current situation. When Greece fought for its independence against the Ottoman Empire in the 1820s, the struggle...

<p>Today German Chancellor Angela Merkel proclaimed Greek Diplomatic Offensive Is Failing.</p> <p>Merkel’s Christian Democratic-led bloc in parliament has agreed not to give in to any “bad compromise that “defacto adds up to a debt writedown,” Hans-Peter Friedrich, a deputy leader of the caucus, said in an interview today.</p>

In 2014 there were six eurozone countries whose debt-to-GDP ratio went over the 100% threshold. Two additional countries will pass that barrier in 2015. The Maastricht Treaty on which the euro was founded was designed to keep "sound fiscal policies", with debt limited to 60% of GDP (not 100%), and annual deficits no greater than 3% of GDP." Every country in the eurozone, including Germany, has been in violation of those rules. Let's take a look at the biggest violators as reported by El Economista. Data is from second quarter of 2014 (undoubtedly worse now). 100% Debt-to-GDP List Italy 133%Portugal...

The eurozone experienced negative inflation for the second month in a row, according to a flash estimate published today (30 January) by Eurostat, the European Union’s statistical office. Inflation is expected to be at −0.6%, with consumer prices falling further than economists had forecast. The fall represents the biggest decline in prices in the history of the euro. […] The drop was driven by the fall in energy prices (−8.9%, compared with −6.3% in December). […] The deflationary spiral comes as Mario Draghi, the president of the European Central Bank (ECB), is trying to tackle deflation with a policy of...

The European Union’s executive Commission said Monday that membership in the euro bloc is “irrevocable” but left it open to what extent Greece could renegotiate the terms after elections on Jan. 25. Greece’s left-wing Syriza party leads the polls ahead of the elections and is in favor of changing the conditions of the country’s international bailout deal. That would likely anger the rest of the eurozone, which has given Athens the bulk of the rescue loans. […] EU spokeswoman Annika Breidthardt said Monday that if the Greek elections call for a need to reconsider the conditions of Athens’ membership within...

It did not take long. The game is very much in play. Greek voters are being bombarded with warnings about what is at stake when they go to the polls on 25 January. There is little that is coded in these messages. When a country has been bailed out to the tune of €240bn (£187bn; $286bn) there is no such thing as non-interference in Greece's internal politics. Most of the European political establishment does not want Greece to elect the radical left party Syriza led by Alexis Tsipras. The party is currently narrowly ahead in the polls. Mr Tsipras is...

German Chancellor Angela Merkel is prepared to let Greece leave the eurozone if Greeks elect a government that jettisons the country’s current austerity course, according to German media reports. The report in the Der Spiegel daily, which cited sources close to the German government, comes as polls show a radical leftist party leading the field three weeks ahead of a snap election in Greece. The Syriza party of Alexis Tsipras has pledged to reverse reforms imposed by Greece’s international creditors and renegotiate its bailout deal. …

Lithuania joined the euro zone at the stroke of midnight on Thursday, hoping to anchor itself in Europe as its former master Russia flexes its military muscle in the region. The first Soviet republic to declare independence, in 1990, Lithuania is the last of the three Baltic states to join the currency union and will be the last country to do so for the foreseeable future, with remaining European Union members at least two years, and probably much more, away. "Myself, and I think, many of you feel sad that (Lithuania's currency) the litas, which has served us well for...

China’s central bank unexpectedly slashed interest rates on Friday to re-energize the world’s No. 2 economy, joining a growing list of major economies that are trying to encourage growth in the face of a global slowdown. On top of the rate cut, Chinese authorities promised to inject credit into the financial system if needed. Meanwhile, the president of the European Central Bank said Friday he was ready to step up stimulus for the 18-country eurozone economy, whose performance continues to disappoint. And Japan’s government this week delayed a tax increase after the country slipped back into recession. News of China’s...

Dutch Finance Minister Jeroen Dijsselbloem has acknowledged that the Dutch government drew up plans for what to do if the single European currency had collapsed during the summer of 2012. In an interview with RTL television on Tuesday, Dijsselbloem said there was a plan to return to the Dutch guilder in a worst-case scenario. …

The eurozone is struggling to revive itself, and may slip into recession in the next two years, slowing down the global economic recovery, according to the French Economic Observatory (OFCE). The director of the OFCE’s analysis and forecast department, Xavier Timbeau, presented his economic predictions for 2014-2015 on 29 October, saying “the eurozone is a problem for the global economy”. The expert believes that the eurozone is acting as a brake on the world economy, and will enter into “a phase of low inflation or even deflation in certain countries,” leading to a eurozone recession within two years. The Observatory’s...

This is an article that was written and sent to me by Alessandra Nucci, an Italian journalist and friend. It describes what the European Union has done to Italy. Since it's a very long article, I've broken it down in 4 parts. Here is the first part. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ How would you feel if for years you had been picking up shipwrecked penniless migrants from Africa, dumped by criminal agents all over the Mediterranean, ferrying them to your shores and taking them in by the thousands, only to see yourself made the butt of sarcasm, reproaches and even pecuniary fines...

The European Central Bank launched a raft of measures on Thursday to fight low inflation and boost the euro zone economy, cutting rates, imposing negative interest rates on its overnight depositors and offering banks new long-term funds. The ECB cut all its main rates to record lows in a drive to fight off the risk of Japan-like deflation and bring down the euro's exchange rate. For the first time, it will charge banks 0.10 percent for parking funds at the central bank overnight. It stopped short of large-scale asset purchases known as quantitative easing for now, but ECB President Mario...

In what some call "crunch time" others a worst case scenario, Ukraine Announces Full-Scale Army Operation on Pro-Russian Militants in Seized Buildings. Ukraine's president says a full-scale operation involving the army will be launched in the east after pro-Russian militants seized government buildings. Acting President Oleksandr Turchynov said he would not allow a repetition of what happened in Crimea which was annexed by Russia last month. His live televised address from parliament came after pro-Russian forces targeted half a dozen cities. An urgent meeting of the UN Security Council will be held in New York. The meeting, at 20:00 New...

The following bullet points are from the French Ipos Poll: New French fractures, results and analysis of the Ipsos/Steria. Although a huge majority of French want to stay on the Euro, a majority of "workers" don't. Poll Conclusions 79% distrust the outside world72% have no confidence in the French National Assembly74% think journalists do not write about the real problems66% think there are too many foreigners in France63% say Islam is not compatible with values of French society84% think politicians act for personal reasons70% Want strengthening of national power away from EU (up 5 percentage points from last poll)33% want...

Germany’s finance minister said on Monday he was open to the creation of a separate European parliament for countries using the euro, a step that could deepen divisions within the European Union. Wolfgang Schäuble’s comments, made during a visit to Brussels, challenge the very foundations of the European Union, where lawmaking for all 28 nations is by the bloc’s current parliament. Splitting that body, critics believe, would represent a dismantling of one of Europe’s biggest symbols of unity. But Schäuble said a separate parliament for the 18 countries in the eurozone would allow the smaller group to integrate more closely....