Foreign media is covering Greece’s new economic crisis with stories ranging from whether the banks can survive a mini-run to the new government’s showdown with international lenders.
Here is a sampling:
NEW YORK TIMES: Bank Trouble Looms Again
As depositors yank their savings from Greek banks, the question is being asked if the ECB. would bail them out again. The question gained urgency late last week as the new Greek government of Prime Minister Alexis Tsipras abruptly cut off talks with the country’s lenders.
While Greece’s banks are in far better shape than they were two years ago, the fear that Mr. Tsipras’ government could be even more radical than advertised has prompted a mini bank run, with bankers and analysts estimating that as much as 14 billion euros has been withdrawn from the banks in the last month.
Bankers say that these outflows accelerated late last week following aggressive anti-Europe comments by new government ministers.
“People are not so much afraid of the banks,” said Gikas Hardouvelis, who was, until last week, Greece’s finance minister. “They are afraid that the Syriza government has no economic plan,” he said, referring to the party that Mr. Tsipras leads.
The minutes from governing council meetings during the Cyprus crisis repeatedly show how frustrated Mr. Draghi became with having to keep Cyprus banks afloat while the Cyprus government resisted signing up for a rescue program.
Now, Mr. Draghi is faced with the prospect of history repeating itself as Mr. Tsipras’ decision to break off talks with Greece’s creditors will prevent much needed cash from being disbursed, while also jeopardizing the health of the country’s banks.
BBC: The Dangerous Game
European officials and governments are much more anxious about the Greek drama than they are admitting publicly. They fear a miscalculation in the weeks ahead could precipitate a full-blown crisis.
What is at stake here is not just the fate of Greece and whether it stays in the Eurozone, but the authority of Germany to define the narrative in Europe and in the Eurozone.
There is urgency to these talks. Greece’s bailout agreement expires on 28 February. If it is not extended, the European Central Bank would have to stop lending Greece money. Also, Athens would not get 7.2 billion euros, the next tranche of bailout money, without a review of its reform program being completed.
The new government has boldly said it would not accept new IMF-EU loans, prompting questions over how long its finances would last without a deal.
AL-JAZEERA: Greece Needs Exit Option
In a commentary, Dean Baker, Co-director of the Center for Economic and Policy Research says that Greece must be ready for the option of leaving the Eurozone.
“The policies that have been imposed by the EU on Greece since the crisis could win a Nobel Prize for economic mismanagement.”
“There is no doubt that an exit from the EU will initially lead to enormous disruption to Greece’s economy. Returning to the drachma would not only be associated with a default on government debt, but many private businesses and individuals would also be unable to meet debt payments denominated in euros. But other countries have worked through a similar adjustment, often with remarkable results.”
“It has damaged Greece’s economy and society so severely that the disruptions caused by leaving the euro are likely to seem minor by comparison.”
“Of course Greece would be far better off retaining the euro and negotiating a budget that allows it to resume growth, but it is far more likely to get the necessary concessions if it also has an exit strategy.”
THE GLOBE AND MAIL: Greece Wants Time For New Deal
“For the last five years, Greece has been living for the next loan tranche. We have resembled drug addicts craving the next dose,” Finance Minister Yanis Varoufakis said after meeting his French counterpart Michel Sapin in Paris.
“What this government is all about is ending the addiction,” he said, noting that it was time to go “Cold Turkey”.
Sapin repeated that Greece could not expect its partners to accept a straight debt write-off. But he left the door open to other options that could include giving Athens more time for repayment.
“Anything that can alleviate the Greek debt burden will be welcome … but of course there is no question of cancelling the Greek debt,” he said.
The head of the Eurozone finance ministers’ group Jeroen Dijsselbloem, has already made clear he doubts the Tsipras government can meet its election pledges while keeping public finances on track.
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