With the Greek election coming Sunday, political and money players across the globe are sweating bullets, and there’s even some gay baiting as the vote draws nigh.
While polls show the likely outcome will be a near-drawn between the leftists of Syriza and the neocons of New Democracy, the uncertainty is approaching panic levels.
Adding to the anxiety are the latest numbers plus a flood of downgrades, many hitting banks in Northern Europe, plus threats to downgrade all the eurozone countries in the even of a Syriza-dominated coalition.
Meanwhile, interest rates on Spanish and Italian bonds are continuing to soar, while Greece itself sinks deep into the slough of despond.
Oh, and there is another election Sunday, one in France that polls show is likely to give the Obamaesque President François Hollande complete control over the National Assembly.
We’ll begin with the latest numbers.
On the brink of Eurorecession
We have a deep dislike of the way economists define a recession. When applied to individual nations and even groups of nation, the term is restricted to broad economic data and omits the human detail.
For instance, employment numbers fail to take into account the changing conditions of work, as in the case of people who remain in jobs but are forced to get by on smaller pay and benefits, while paying out more for goods and services.
We would argue that both Europe and the U.S. are in a state of depression, characterized by fewer jobs that pay less for more work and reduced benefits. But the data used in calculated recessions and depression doesn’t include such finely tuned parameters.
That said, the latest data, reported by New Europe:
More statistical data are indicating that Eurozone is heading soon towards a recession period. Eurostat, the statistical service of the European Union, released some days ago data clearly showing that the euro area month to month inflation rate in May was negative, an infallible sign of reduced economic activities.
Earlier on Eurostat had released Gross Domestic Product statistics proving that Eurozone was only 0.1% away from the negative part of the growth chart. Today, Friday 15 June Eurostat published its estimates on employment developments in Eurozone, indicating that there are fewer people with productive occupation.
In detail Eurostat informs that during the first quarter of 2012 in relation to the last three months of last year, “The number of persons employed decreased by 0.2% in the euro area(EA17) and remained stable in the EU27… In the fourth quarter of 2011, employment fell by 0.3% in the euro area and by 0.1% in the EU27.”
Alexis Tsipras, the man who scares the Troika
First, a new campaign ad from Syriza:
And here’s an election report from Agence France-Presse:
Charles Hawley of Spiegel deftly summarizes the ways Tsipras and his movement are perceived:
One way to look at Alexis Tsipras, the 37-year-old wunderkind of the Greek left, is as the leader of a small yet rapidly growing political party on the edge of Europe – a party that stands to attract some 3 million votes in Sunday’s election. Three million votes out of a European Union population of a half billion. Just over half of 1 percent.
There is another way to look at Tsipras, however – as the European politician who, perhaps more than any other, holds the fate of the European common currency in his hands. It is this second interpretation that has the entire world gazing with fear as Greeks head to the polls this weekend. Tsipras, after all, has promised Greece that he will abandon the deep austerity measures imposed by the EU in exchange for bailout aid – with Brussels threatening to suspend those payments, and send Athens into bankruptcy, should he do so. It is a game of political chicken that could bring down Europe.
Central banks around the world are preparing for the potential financial earthquake that could accompany a victory of Tsipras’ Syriza party. Reuters reports on Friday that central banks in Britain, Canada, Japan, China and India are all working on contingency plans or have said they are prepared to take measures to counter any financial market turbulence that could result from the vote.
And this lead paragraph from a EurActiv story deftly sums up the freight seen as riding on the election’s outcome:
Greeks go to the polls on Sunday (17 June) in what is considered the most decisive election in the country’s post-authoritarian history. An inconclusive result, or a victory for the anti-bailout political forces, may spur Greece’s exit from the eurozone and could most likely spark a “perfect storm” for the rest of the EU.
Crass electioneering outrages Greeks
Imagine that the world’s leading financial publication, produced in the heart of a country that had a deep vested interest in furthering an agenda harmful to your country, came out and endorsed candidates in a domestic election.
The outrage would probably be enough to force even the editorials beneficiary to cry foul, as in the the old Cold War days Pravda had endorsed Lyndon Johnson over Richard Nixon.
Well, it happened to Greece, with just such results.
Greek parties reacted with outrage on Friday after the German edition of the Financial Times made a front-page call on Greeks to vote for the New Democracy conservatives in the upcoming election.
“Dear Greeks, create clear political conditions. Vote courageously for reforms instead of angrily against the necessary, painful structural changes,” read the Financial Times Deutschland’s editorial, published in Greek and German.
“Your country will only be able to keep the euro with parties that accept the conditions of the international creditors,” the daily said, adding: “Resist the demagoguery of Alexis Tsipras and his (radical-left party) SYRIZA.” It endorsed the New Democracy party led by 61-year-old Antonis Samaras.
SYRIZA condemned the editorial as “a crude and unprecedented intervention, which offends national dignity and tries to undermine democracy.” The only thing left now is for German Chancellor Angela Merkel to “come and hand out ballots for the right,” said top SYRIZA official Dimitris Papadimoulis.
New Democracy too was careful to dismiss the endorsement from a newspaper in a country that is widely reviled in Greece as it is seen as the main force behind a raft of painful austerity measures imposed in recent years.
Meanwhile, banksters brace for the vote
A whole slew of stories are out today about the panicky preparations for the election in the corridors of political and financial power [is there any difference?]
First up, from Stella Dawson and Lesley Wroughton of Reuters:
Central banks from major economies stand ready to take steps to stabilize financial markets by providing liquidity and preventing a credit squeeze if the outcome of Greek elections on Sunday causes tumultuous trading, G20 officials told Reuters.
A senior U.S. official cautioned that the Greek election will not provide “the definitive signal on what happens next” in the euro zone debt crisis.
But if severe market strains emerge after an unusual confluence of three elections this weekend – there are important polls in Egypt and France as well – central bankers are on standby to ensure enough cash is flowing through the financial system.
“The central banks are preparing for coordinated action to provide liquidity,” said a senior G20 aide familiar with discussions among international financial diplomats. His statement was confirmed by several other G20 officials.
More from David Jolly of the New York Times:
The head of the European Central Bank said Friday that central banks were ready to step in to address any financial market turmoil that might result from elections in Greece this weekend that could help to decide the future of the euro.
“The Eurosystem will continue to supply liquidity to solvent banks where needed,” Mario Draghi told a group of economists in Frankfurt.
In Tokyo, the Bank of Japan governor, Masaaki Shirakawa, said the central bank was “prepared to take all possible measures to ensure the financial system does not come under threat,” calling the European debt crisis “the biggest risk factor we are paying attention to.”
In Bern, the Swiss central bank said it was prepared to spend unlimited amounts of money to hold down the value of the Swiss franc if the euro came under further pressure.
Brits launch another stimulus
The United Kingdom sits in a unique position as a major economy in the European Union that’s not a member of the common currency zone.
And Old Blighty’s response to the economic uncertainty posed by the election is the launched of yet another round of economic stimulus.
From the BBC:
Bank shares have jumped in the wake of plans from the Bank of England to launch two new stimulus packages.
The Bank of England’s announcement of its plan, on Thursday, came in response to the worsening economic outlook, governor Sir Mervyn King said.
Together with the government, it will provide billions of pounds of cheap credit to banks to lend to companies.
Royal Bank of Scotland was the biggest riser, up 6.4%. It was followed by Barclays, which had risen 4.2%.
Banks will also have access to short-term money to deal with “exceptional market stresses”. The chancellor said the measures would “inject confidence”.
In his annual Mansion House speech, Chancellor George Osborne said the stimulus packages would “support the flow of credit to where it is needed in the real economy”.
“We are not powerless in the face of the eurozone debt storm. Together we can deploy new firepower to defend our economy from the crisis on our doorstep,” he said.
The Independent’s Ben Chu summed it up this way:
The Governor of the Bank of England and the Chancellor of the Exchequer last night announced measures designed to prevent a new credit crunch that would push Britain’s economy deeper into recession. The move was a clear sign that the Governor and the Treasury are alarmed by the prospects for the economy in the face of potential financial shocks from the eurozone.
Meanwhile, Germany continues electioneering
This time, the head of the all-powerful Bundesbank.
The euro zone can’t allow any country to blackmail it with the threat of financial contagion, the chief of Germany’s Bundesbank Jens Weidmann said on Friday, two days before a Greek election that will decide if the debt-laden country will stick to the strict terms of its EU/IMF bailout deal.
“In any case, we must not allow any country to blackmail us with the consequences of contagion,” Weidmann, who is also a member of the governing council of the ECB, was quoted as saying according to Reuters citing an interview with Greek newspaper Kathimerini.
He said Greece had to stick to the terms of the 130 billion euro bailout programme agreed in March and he ruled out any extension of the programme’s timetable to allow Greece more time to reach its targets.
And Merkle continues to merkle
“To merkle” is our own neologism, a verb which we define this way: “To demand that less powerful nations surrender their autonomy and democratic structures to the interests of Germany and the Bundesbank.”
It’s kind of like S&M, with the only safe words being “We surrender.”
Germany’s Angela Merkel criticised France’s economic performance on Friday (15 June), warning against “mediocrity” in tackling Europe’s deepening debt crisis as discussions continued over greater fiscal and economic integration in the eurozone.
Merkel, under pressure from eurozone peers to ease up on her austerity drive in Europe, reiterated her view that issuing new debt to finance economic growth is not sustainable and she again ruled out a mutualisation of debt, or eurobonds, to tackle the crisis.
Such moves would open a “path to mediocrity”, she told a gathering of German entrepreneurs on Friday, saying she will reject any such “quick” crisis solutions.
French President François Hollande has spoken out in favour of swiftly adopting eurobonds and also insists that Europe needs to do more to revive growth to offset its German-inspired focus on tackling budget deficits and public debt.
Merkel has not ruled out eurobonds entirely but said they could only be envisaged at the conclusion of a longer-term process of political and fiscal union in the eurozone and sovereignty transfers to Brussels – a bold federalist step that France is hesitating to take.
Rating agencies strike again with downgrades, warnings
There’s a whole raft of them today, and they’re hitting banks in Northern Europe, a clear signal that crisis contagion has already struck in Europe’s stronger economies.
Moody’s has cut the ratings of 11 European banks and said it would cut again if Greece ditched the euro, kicking off a long-awaited round of downgrades for major European institutions.
Moody’s Investors Service said on Friday it had taken action against five Dutch banking groups, three French banks and one each from Belgium and Luxembourg.
Investors shrugged off the news after central banks from major economies had indicated they were prepared to take steps, including coordinated action, to stabilise markets in the wake of Greece’s election on Sunday. The benchmark FTSEurofirst 300 index .FTEU3 was up 0.7 percent at 09:35 British Time (0835 GMT).
Still, the downgrades will only add to pressure on European Union leaders to sort out the region’s debt crisis.
More from Deutsche Welle:
The policies of the new French President Francois Hollande could weaken the country’s finances and increase its banks’ need for help, Egan Jones Ratings said Friday.
As a result of this assessment, the number four among the big US ratings agencies lowered France’s creditworthiness to BBB+ from A- and assigned a negative outlook that could herald future downgrades.
In another round of ratings cuts, agency Moody’s downgraded five Dutch banks on Friday. The banks are ING Bank, ABN AMRO, Rabobank, LeasePlan Corporation and SNS Bank.
Moody’s said the banks’ business was likely to remain difficult as a result of falling house prices in the Netherlands, owing to their large exposure to mortgages and inter-bank funding.
Fitch also joined the downgrade wave, striking even more broadly with a warning aimed at a whole continent.
From Agence France-Presse:
Fitch ratings agency warned on Friday, two days before key elections in Greece, that a Greek exit from the eurozone could effect the ratings of regional and local authorities across the eurozone.
“In the event of a Greek exit from the eurozone all Eurozone sovereigns would initially be placed on Rating Watch Negative,” Fitch said meaning that a credit rating downgrade could then be imminent.
“In that event, the ratings of about 120 local and regional governments” and public utilities across the eurozone would also be subject to an imminent downgrade.
The pain in Spain flares anew
More proof that the now thoroughly discredited weekend bailout was a total bust.
From the BBC:
Spain’s borrowing costs have risen to another euro-era record, with lenders demanding a higher interest rate.
The yield on benchmark 10-year bonds hit 7% in early trade, a level which many analysts believe is unsustainable in the long term. It later fell back slightly.
It came as Moody’s cut Spain’s credit rating to one notch above “junk”.
Italy also saw borrowing costs rise, selling bonds repayable in three years with a yield of 5.3%, up from 3.9%.
Spanish debt hits highest level in 99 years
The sheer idiocy of Iberian insanity is revealed in another set of numbers.
Since the start of the crisis in the first quarter of 2008, Spain’s debt has doubled, increasing from 35% of GDP, nearly 377.917 billion euros, to 72.1% of the country’s GDP in the first quarter this year, totalling over 774.549 billion euros, according to figures released today by the Bank of Spain. The level of debt is rapidly approaching the target set for the entire year 2012 by the government of 79.8% of GDP.
The level recorded by the government on the whole is the highest since 1913, according to the IMF statistics. The rapid increase in the country’s level of debt is mainly due to the debt accumulated by the autonomous communities, which increased by 15.74%, equal to nearly 19.736 billion euros. The deficit for the regions stood at 3.3% of GDP in 2011, compared to the 1.5% target according to stability objectives.
In other words, Spain has to borrow to “recover,” but the cost of borrowing is so high that it ensures that the outcome won’t be recovery bt deeper immiseration.
The sheer insanity of “solving” a debt-created crisis by piling on more debt is comparable to the notion of saving a drowning man by adding lead weight to his ankles.
And now on to Greece. . .
Desperate pol resorts to gay-baiting
The pol in question is a former foreign minister who’s run for parliament.
We’ll quote the entire post from Keep Talking Greece because it’s just so much fun:
oops! My innocent ears did not believe what they heard on state NET TV live: ex Greek Foreign Minister, ex Nea Dimocratia official, former Democratic Alliance leader and current Nea Dimocratia candidate Dora Bakoyanni saying such a word: ‘κολομπαρίστικαa’ very vulgar word implying somebody is gay.
Dora Bakoyanni was criticizing SYRIZA’s changes in it spolicies when that particular word came out of her mouth ”In SYRIZA, they speak kolomparistika [in a gay way]“, Bakoyanni said stunning moderate SYRIZA representative Papadimoulis, ex PASOK Minister Chrysochoidis, NET TV prime time news presenter Stai and the audience.
Papadimoulis said “That’s a Shame!”, Chrysochoidis had a technical problem and could not hear -respectively react. As far as I remember, Stai had never seen Law&Order and did not interven into order to bring Bakoyanni back to order…
This word seems to have turned into the favorite expression of the former Greek Foreign Minister, as Dora Bakoyanni has recently used the same word and thus in the same context with SYRIZA.
As the blood is boiling 48 hours before the elections and the hunting for the last undecided vote is at its peak, the culture of our politicians unfolds before our eyes and ears in full greatness…
The debate in NET continued, with Bakoyanni trying to make fun of SYRIZA “You get horrified when you count together the rates of ND and DEMALLIANCE [her party got some 2.5% on May 6 elections].
Papadimoulis, calm as always, returned: “You remind me of Enver Hoxha [Albanian dictator], who used to day, ‘we, Albanians, and the Chinese are one billion people”.
Greek billionaire backs Syriza
One of Greece’s richest men, a shipping and steel magnate worth an estimated €2.8 billion, has come out for the radical Left coalition in Sunday’s elections.
From Areti Kotseli of Athens News:
The son of Theodoros and Gianna Aggelopoulos, best known for being the president of the bidding and organizing committee for the 2004 Summer Olympics in Athens, has published an article on rednotebook.gr supporting SYRIZA and its leader Alexis Tsipras. Last year, Indignant Greeks were surprised to see a billionaire in their midst screaming that they could not go on any more with austerity. Now, once again the Greek media find his ideological manifesto on a leftist website and cannot but criticize it.
His article entitled “Dilemmas of the Euro and the Crisis of the Eurozone: Answers and New Challenges from Recent History of the European Left” summarizes the history of the international economy from the late 1960s up until now based largely on the writings of SYRIZA members, such as Giannis Milios and Euclid Tsakalotos. Panagiotis Aggelopoulos has called on a new deal for Europe.
He expresses the view that “neoliberalism, apart from being a utopia-dogma, presents a revolutionary political project for the establishment of smoother conditions in regard to capital accumulation and restoration of the strength of the economic elites.”
He notes that the “role of the European Central Bank must be radically revised, and moreover that European banks be put into public, transparent control and start functioning in the public interest.”
Panagiotis Aggelopoulos underlines that “defending the collective consumption goods, establishing a welfare state, eco-transforming the economy, regulating and taxing the stock markets, redistributing the incomes and the authority from the capital to the employment and cancelling the laws which turn a dissent life from right to privilege are demanded on a Pan-European level.” He furthermore expressed the view that with the exception of the Memorandum, the whole European framework must be revised, referring to the founding Treaties. He noted that “growth” based on downgrading the common prosperity along with privatizations and “special Free Trade Areas” are less important than the people’s well-being.
Another Grexit underway
This time by the continent’s French-based monarch of Big Box stores.
From Athens News:
Carrefour, Europe’s biggest retailer, announced on Friday that it was selling its stake in its Greek joint venture to local partner Marinopoulos, which will become its franchisee.
Carrefour, which saw first-quarter sales plunge 16 percent in Greece, said it was taking a 220m euro mostly non-cash charge as a result of the deal.
The world’s second-biggest retailer behind Wal-Mart Stores made 2.2bn euros of sales in Greece last year, but Espirito Santo analysts estimate the business lost around 40m euros.
“It’s not a bad move even if it costs them money,” said analyst Laurence Hoffman from Oddo Securities.
The sale is one of the first decisions by Carrefour’s new boss Georges Plassat, who is due to address shareholders for the first time on Monday amid hopes he will give some clues on his turnaround plan for a group that has been hit hard by its exposure to sluggish European markets.
Misery may like company, but companies don’t like misery, at least when it threatens their sales.
In a discussion with Moussequetaire, our Paris-based muse, we wondered is we’re not seeing the opening salvos of a winner-take-all war between producers and sellers on one side and finance on the other.
Quantifying the human costs of Greek misery
Some very revealing new numbers highlight the immense costs of austerity to those least able to defend themselves, the children of Greece.
From CNN’s Matthew Chance and Christine Theodorou:
The Hellenic Statistical Authority, which compiles data for the state, said the unemployment rate in the first quarter of the year was 22.6%. It also said 27.7% of the Greek population is on the verge of poverty or facing the danger of poverty. The numbers don’t include groups like Roma, who are Gypsies, illegal immigrants, the homeless and institutionalized people.
[The] troika is demanding deeper cuts to social spending, creating what social workers are calling a wave of “economic orphans,” abandoned not through lack of love, but money.
“I think this is the first time I’ve seen so many poor families asking for help for their own children,” says Stelios Sifnios, director of SOS Children’s Villages, a European charity providing support for struggling Greek families, including orphanages.
The authority lacks a count for economic orphans, but one of its statistics signals potential problems for families. It says 22.9% of all types of families with children under the age of 18 are on the verge of or face the danger of poverty.
“Before the economic crisis, the majority of our kids came from problem families, with parents who were drug addicts or alcoholics. Now most new arrivals are from families who can’t afford them,” he adds.
The true face of austerity is that of a child in the throes of hunger pangs.
A Greek story told only in part
There’s a lot more to this story about an ongoing rebellion at Greek universities.
State universities have been left without funding, and without leadership, due to protests by students and professors against the enforcement of a new law aimed at improving academic standards through better evaluation and the appointment of new rectors.
According to a law passed last summer, university rectors must withdraw from their posts by August 31. But due to widespread opposition – both at the academic level and among student unions which traditionally wield a strong influence – there has been no leadership change in any state universities (although 10 of the 14 technical colleges have made the switch). As a result, no universities have a budget for this year as the funding must be approved by a newly elected university senate.
The rector of the University of Ioannina, in northwestern Greece, Triantafyllos Albanis, said the situation was already desperate.
“Universities have started accumulating debts to suppliers and to utilities,” he said.
What we don’t know is just what standards are being mandated, by whom, and for what precise reasons. We suspect there’s a great deal more to this story, and suspect it’s part of the process of corporate takeover of academia we’ve seen firsthand here in California.
Heroes of the Greek Fourth Estate
Here’s a story that brings us a great deal of satisfaction.
From CNBC’s Catherine Boyle:
One of Greece’s best-known newspapers, Eleftherotypia (or “freedom of the press”), probably the closest Greek equivalent to The Guardian, all but closed down in December after the family business which backed it ran out of cash. Its staff haven’t been paid since August, yet around 600 of them (down from 850 last August) are planning two special editions of the newspaper around the election this weekend.
“We keep on working because we work in a business that has always been very liberal, we like the environment of the newspaper, and it is a newspaper that we truly believe in,” Katia Antoniadi, one of the journalists at Eleftherotypia, told CNBC.
“Of course, we also know that if we go out and look for another job we will get nothing, because the media in Greece is in crisis.”
These unpaid Greek journalists are, to borrow a Greek word, the epitome of everything good about the craft. Their dedication is to serving the community, with economic motivations running a distant second.
Yes, they may have no other job opportunities in the austerian world they [and we] inhabit, but their goal is public service, and they keep doing it, even though they haven’t had a paycheck for 10 months [something we can identify with].
Our ink-stained hat’s off to them.
Troika’s blackmail strangles a nation
One of the crassest bits of Greek electioneering is causing great harm to the people of Greece.
Already, the eurozone has withheld part of last month’s bailout installment and the pre-election paralysis has caused an unprecedented fall of public revenues.
The Greek state will therefore completely run out of cash within the next three to four weeks if the stalemate continues. The situation in other sectors of the economy is equally severe: the Athens Stock Exchange Index has fallen by more than 90% in comparison to pre-crisis levels. The economy is shrinking for a fifth year in a row and GDP is expected to contract by 20% in comparison to pre-crisis levels. House prices have collapsed by almost 50%.
Unemployment has reached 22%. More than half of Greek youths have no job, or prospect of finding a job.
All private electricity providers have gone bankrupt and the only utility provider left (the state-owned DEI) is facing imminent bankruptcy, due to the huge number of unpaid bills. The state owned gas provider has also ran out of cash, and it is possible that very soon no one will be supplying oil or natural gas in Greece.
The country is facing problems in importing medicines. Tourism, the country’s only “heavy industry”, is also in crisis, as a double-digit fall in both revenues and arrivals is expected this year. In short, the Greek economy is in danger of utter implosion as early as July.
The folks with the purse strings are clearly electioneering following the guidelines the U.S. famously followed in the “hearts and minds” campaign during the Vietnam, where the unofficial motto was “Grab ‘em by the balls and their hearts and minds will follow.”
Grexit speculations abound
The real reason for all that electioneering is crystal clear: The powers that be are scared stiff of what a Syriza-controlled parliament might do.
The worst outcome from the Troika’s perspective is a Grexit, a Greek exit from the eurozone.
From Jack Ewing and Paul Geitner of the New York Times:
“The consequences are incalculable — nobody can pretend to know what would happen,” said Holger Schmieding, chief economist of Berenberg Bank in London. But he added, “Policy makers are very aware this is a high-risk event and are thinking through possibilities, which they didn’t do before Lehman.”
Are the preparations adequate?
Views on that issue have become increasingly polarized. Some economists and policy makers say that the departure of Greece would be a shock to the world economy, but survivable, and maybe even not that big a deal.
“I do believe it would be tolerable for the remaining member states,” said Ferdinand Fichtner, head of forecasting at the German Institute for Economic Research in Berlin, which advises the German government. But Mr. Fichtner, speaking to reporters in Berlin, quickly added, “It should be the last option.”
In the opposite camp is the E.C.B., which has warned that the shock could indeed rival Lehman’s collapse. There are simply too many unknowns to quantify, Vítor Constâncio, the vice president of the central bank, said this week.
“Any assessment would be virtually impossible to do,” he said.
But they’re planning for it anyway
Indeed, they’re parsing out the details to the drachma.
Senior European officials also said contingency planning in the case of a Greek exit included how to respond should cash-strapped Athens issue IOUs to meet salaries and bills while awaiting to reintroduce the drachma.
“That does not mean we are aiming for this specific scenario,” a source told AFP just days after reports that Brussels was mulling withdrawal limits on Greek bank ATMs and wider electronic capital controls, “We have prepared technically for all realistic scenarios, even the unthinkable, as you would expect from responsible officials,” said a senior EU source.
One aim of a coordinated response from eurozone nations would be to spell out a joint position on events in Athens to avoid capitals talking out of turn ahead of the start of trading on Monday.
That problem occurred days ago when Austria’s Finance Minister Maria Fekter speculated out loud that Italy might be next after Spain to go look for help.
“Totally inappropriate”, said Prime Minister Mario Monti.
“We need a line,” an EU official told AFP this week.
And, as always, the perceived solution is power to Brussels
And their plan is almost ready.
From Agence France-Presse:
European Central Bank chief Mario Draghi fuelled speculation Friday of an imminent rate cut, warning of “serious downside risks” to the euro area economy while inflation is no threat.
At the conference on Friday, Draghi also said Europe’s policymakers would make known their vision for the euro area – which is vital to reassure markets and the bloc’s citizens – very soon.
Draghi said he was “in close contact with (EU president) Herman Van Rompuy, (EU Commission chief) Jose-Manuel Barroso and (the head of eurozone finance ministers) Jean-Claude Juncker to reflect on elements of a longer-term vision for our economic and monetary union.”
The four have been tasked with forming a “masterplan” for the eurozone’s future.
Asked when the outcome of those deliberations would be made public, the Italian replied: “Very soon. All the work we’re doing is with a view to the next summit” at the end of June.
Finally, Hollande set to consolidate power
French President François Hollande looks set to win control of the National Assembly Sunday, with the latest poll showing his socilist party set to gain an absolute majority of seats.
From Joseph Bamat of France 24:
Opinion polls in France show that the Socialist Party will likely enjoy an absolute majority in parliament as voters head to the second round of legislative elections on Sunday.
A victory for Socialists on June 17 would cap a string of triumphs, notably President François Hollande’s runoff win over conservative former president Nicolas Sarkozy last month, and also the French left’s takeover of the Senate in September 2011.
A socialist parliamentary majority would rub salt on the open wound of the centre-right Union for a Popular Movement (UMP), still reeling from its defeat in the presidential poll and now grappling with internal tensions.
According to Celine Bracq, an opinion expert with the French polling firm BVA, Hollande’s camp has appeared to increase its advantage between the two rounds.