Greece: Krugman slams Greece, Germany slams Krugman - by Matt Clinch

Renowned economist, and a fervent critic of austerity, Paul Krugman has slammed the Greek government for accepting harsh tax and reform measures. On the very same weekend, German Finance Minister, Wolfgang Schaeuble, openly questioned the Nobel Prize-winner's knowledge of Europe's monetary union.

Krugman had been calling for Greece's government to reject the proposals that creditors have demanded in exchange for unlocking much-needed cash. He had dubbed the demands as "madness" and a "complete destruction of national sovereignty."

With the reforms having been given the green light, Krugman told CNN Sunday that he may have "overestimated the competence of the Greek government."

"(The Greek government) thought they could simply demand better terms without having any backup plan," he told the news channel in an interview. "So, certainly this is a shock."

The radical-left Syriza Party was elected this year with a mandate to reject tough austerity measures from creditors but last week agreed to a deal despite Prime Minister Alexis Tsipras stating that he did not believe in it. Tsipras has since tried to weather a storm within his own party and experts suggest that another election could come later this year.

Krugman - a noted Keynesian - has been a very vocal critic of the austerity that has been placed on Greece from euro zone lawmakers, which include those in Berlin. Schaeuble used an opportunity to respond to Krugman when asked about the economist in an interview with German newspaper Der Spiegel.

"Krugman is a prominent economist who won a Nobel Prize for his trade theory," he said in an interview on Saturday.

"But he has no idea about the architecture and foundation of the European currency union. In contrast to the United States, there is no central government in Europe and all 19 members of the euro zone must come to an agreement. It appears Mr. Krugman is unaware of that."

Read more: Krugman slams Greece, Germany slams Krugman

Greece: With Greek ‘No’ Vote, Tsipras Wins a Victory That Could Carry a Steep Price - by Liz Alderman

Prime Minister Alexis Tsipras may have won a victory at home on Sunday as the Greek people dealt a resounding “no” to European austerity policies.

But Greece risks paying a high price for that decision. While the vote sharply consolidated Mr. Tsipras’s popularity, that could fade quickly if he leads the country deeper into bankruptcy and financial chaos, creating a new round of instability with consequences for Greece and the broader European project.

If anything, Mr. Tsipras is likely to find it harder, rather than easier, to strike a new financing deal quickly with European creditors, heightening the risk that Greece will careen out of the eurozone unless Europe decides to give Mr. Tsipras and his defiant nation another chance.

“What we need now is more wisdom from both sides,” said Loukas Tsoukalis, the president of the Hellenic Foundation for European and Foreign Policy, an Athens-based think tank. “Greece can’t go on because we’re on the edge of cliff,” he said. “After all this, the question is whether our partners would be so unwise as to push Greece over the edge, because that would be damaging for everyone.”

Some European officials acknowledged Sunday that greater flexibility might now be needed from their camp. Just as the referendum vote divided Greece, so, too, did it reveal fault lines between those European countries that appear willing to bend to keep Greece in the eurozone, and others, including Germany and the Netherlands, whose policy makers have all but suggested that the eurozone would be better off without Greece.

Read more: With Greek ‘No’ Vote, Tsipras Wins a Victory That Could Carry a Steep Price - The New York Times

Greece - Germany : A different vision, but the same goal: Merkel and Tsipras agree to cooperate

In his first official visit to the German capital, Greek Prime Minister Alexis Tsipras pledged to honour his country’s commitments following almost five years of austerity measures.

He said it was important to move away from stereotypes about the two nations, adding that Greece’s economic problems were not the fault of any one country or institution.

Speaking from a press conference in Berlin, both Tsipras and Merkel agreed Athens needs to make big structural reforms in order to fight widespread tax evasion and corruption in Greece.

Such reforms, combined with a solid Greek budget would provide the foundations for a return to growth and a rise in employment, they added.

Read more:A different vision, but the same goal: Merkel and Tsipras agree to cooperate | euronews, world news

Greece's Euro Exit Seems Inevitable - by Mark Gilbert

Greece's money troubles resemble a game of pass the parcel, where each successive participant rips another sheet of wrapping paper off the box -- which turns out to be empty when the final recipient reaches the core. With time and money running out, a successful endgame seems even less likely than it did a week or a month ago. It's increasingly obvious that the government's election promises are incompatible with the economic demands of its euro partners. Something's got to give.

The current money-go-round is unsustainable. Euro-region taxpayers fund their governments, which in turn bankroll the European Central Bank. Cash from the ECB's Emergency Liquidity Scheme flows to the Greek banks; they buy treasury bills from their government, which uses the proceeds to … repay its International Monetary Fund debts! No wonder a recent poll by German broadcaster ZDF shows 52 percent of Germans say they want Greece out of the euro, up from 41 percent last month.

There's blame on both sides for the current impasse. Euro-area leaders should be giving Greece breathing space to get its economic act together. But the Greek leadership has been cavalier in its treatment of its creditors. It's been amateurish in expecting that a vague promise to collect more taxes would win over Germany and its allies. And it's been unrealistic in expecting the ECB to plug a funding gap in the absence of a political agreement for getting back to solvency.

Read more: Greece's Euro Exit Seems Inevitable

Greece: Syriza declares war at home on Greece's 'oligarchs'

International attention on Greece since the Syriza party took over has focused on the leftist government's fight against austerity.

But Panagiotis Nikoloudis (65), a supreme court prosecutor and specialist on economic crime, is leading another battle declared by Syriza: one on the home front, against some of the wealthy businessmen who dominate Greek political and economic life.

Speaking to parliament last week, Nikoloudis denounced an elite that included a "handful of families who think that the state and public service exists to service their own interests."

"Such businessmen influence politicians and state officials abuse their control of the media to unfairly win state
contracts, change regulations to their advantage or escape prosecution for illegal conduct," he said.

As a non-political outsider with a clean record, Nikoloudis is a popular appointment among Greeks who believe corruption is deeply embedded in society.

He has a reputation for action, and says the financial intelligence unit, which he led until now, developed a system of audits that identified over 20,000 people whose assets do not match their tax declarations.

Read more: Syriza declares war at home on Greece's 'oligarchs' - Independent.ie

EU: Austerity is not working around Europe - Time for change?

The Guardian notes in an editorial that at a stroke, the Greek general election of 2015 has destroyed the post-recessionary political norms and assumptions of Greece and shaken those of the European Union to the core as well.

For six years, Greeks have protested against harsh eurozone disciplines, but the nation’s eventual, though resentful, readiness to put up with the resulting hardships has been a source of stability. In Sunday’s vote, however, Greek patience finally snapped, particularly among the middle classes, ousting the pro-austerity government of New Democracy and electing the anti-austerity left-coalition Syriza in its place.

As a consequence, the past is no longer much of a guide to the future, at least in Athens, and perhaps elsewhere in Europe.

For the complete editorial  from the Guardian click here 

Greece: Greek radical-left leader vows to end Wall Street imposed 'humiliation and pain'

Greek leftist leader Alexis Tsipras promised on Sunday that five years of austerity, “humiliation and pain” imposed by international creditors were over after his Syriza party swept to victory in a snap election on Sunday.

Read more: Europe - Greek radical-left leader vows to end 'humiliation and pain' - France 24

Dutch Government Crises: "SMOKESCREEN IS KEEPING RUTTE GOVERNMENT ON LIFE SUPPORT "

The pieces might have been stuck together, but the "adhesive" attempts of the Center-Right Rutte II  Government are taking more and more desperate forms.

To limit further loss of face lhe Government coalition is trying to find a way to sneak past the Upper Chamber (Senate) blockage of their revised health-care legislation. 

Opposition parties which have been collaborating with the government on major issues have indicated they will not support changes in the legislation.

Read more: Rookgordijn houdt kabinet-Rutte II overeind - AD.nl

For a translation of this Dutch language report click here, copy and paste in the link of the above webpage and fill in your language requirements 

The Netherlands: Dutch Minister Of Finance Dijselbloem Optimistic About Dutch Economic Recovery

Next year there will absolutely be economic growth said Dutch Treasury Secretary Jeroen Dijsselbloem (PvdA) Monday during a party meeting in Amsterdam. '

"But the annual explosive growth rate we had in the 1990s will  not return anymore, and  I don't want this either, because it was not sustainable growth" said Dijselbloem '

The Dutch Office For Economic Policy Analysis (CPB)  reported last week that the Dutch economy will grow by 0.75 percent in 2014, but in that estimate the new austerity package of EUR 6 billion was not included.

It is generally assumed that the new austerity measures and tax increases will slow down the economic recovery said  Dijselbloem , but he reckoned that  the Netherlands will still show some growth next year.

Dijselbloem  also said one of the major difficulties at the moment for the Dutch economy was the depressed housing market.  He said it was not his intention to give any advice or make an appeal for people to spend money, but said he considered this to be an excellent time to buy a home with interest rates at rock bottom before interest rates go up again.

Almere-Digest