Here we go again (sound familiar ?)

[OFSO]

Grexit? Greece again on the brink as debt crisis threatens break with EU

In the week of Groundhog Day it seemed entirely appropriate: Greek farmers, many on tractors, have once again been blockading roads and border posts amid mounting signs that the country long at the centre of Europe’s debt woes is – once again – teetering towards crisis.

Protesting farmers have been a regular feature of the social unrest that has sporadically gripped Greece. It is now more than seven years since the Greek financial crisis erupted and the debt drama has often had a deja vu quality about it.

Eclipsed last year by the UK’s vote to exit the EU, and Donald Trump’s equally unlikely US electoral victory, the nation’s epic struggle to keep bankruptcy at bay has been out of the spotlight.

But away from the headlines, a perfect storm is brewing.

Bailout negotiations between Athens and its creditors have stalled. The possibility of Grexit, or euro exit, has re-emerged and bond yields have soared. The yield on two-year Greek government bonds has risen from 6% to 10% in less than two weeks as spooked investors have dumped their holdings. And the shrill rhetoric last seen at the height of the crisis in 2015 has returned.

Analysts sensing dangerous deadlock are sounding the alarm – an alarm that the embattled prime minister, Alexis Tsipras, was expected to raise in talks with the German chancellor and other European leaders in Malta on Friday.

“I am very worried we are heading towards a rupture with the EU,” said Pantelis Kapsis, a prominent political commentator. “There are lots of signs that at the back of their minds people in Syriza [the ruling leftist party] are entertaining various ideas of going it alone. What is sure is that we are entering a very difficult period which quite possibly could lead us to a point of no return.”

As always, time is of the essence. Shored up by a third EU-led bailout, Athens was told this week that further rescue funds would not be forthcoming until it concluded a compliance review of terms attached to the €86bn (£74bn) aid package. In July Greece faces debt repayments of €7.4bn, raising the spectre of default because state coffers by then will have run dry.

The impasse has turned into a standoff as creditors demand additional austerity once the current bailout expires. Without further reduction of pensions – already cut 12 times since the crisis began – and the tax-free threshold of personal incomes, the International Monetary Fund (IMF) argues, the debt-stricken country will never be able to achieve its agreed fiscal goal of a primary surplus of 3.5% of GDP from 2018.

In a fiery parliamentary debate late on Wednesday, Tsipras dug in, insisting his two-party coalition – in power with a wafer-thin majority of two – would not cave in to demands that his government has repeatedly called absurd. “The IMF’s demands go beyond any democratic and constitutional logic and value,” he railed.

Completion of the review is essential to Greece, exiled from international capital markets, being included in the European Central Bank’s 9 March bond-buying programme, key to the country regaining market access. If the deadline is missed few believe Athens will be able to keep itself afloat without a fourth bailout once the latest loans end.

And in a Europe preoccupied with other matters – and in fear of an anti-establishment ascendant far right – the prospect of that happening is slim. “What we are witnessing is a disaster for the real economy because everything is on hold,” said Costas Panagopoulos who heads the Alco polling institute. “Once again we are talking about economic catastrophe, once again we are talking about Grexit,” he told the Guardian. “The next few weeks are critical. If an agreement isn’t reached, if there is more uncertainty, we don’t know how Greeks will react.”

On Thursday, amid widespread rumours of his own resignation, the finance minister Euclid Tsakalotos attempted to deflect the spiralling tensions. In a written statement the Marxist economics professor said that while a third of the bailout review had been “totally completed” and a third “totally agreed”, the rest remained subject to “political negotiation” – raising little hope of the talks concluding any time soon.

But what happens next is dependent not only on what happens in Athens. To a great degree events in Europe and Washington will also play a role.

Ahead of Germany’s general election in September, Berlin’s finance minister Wolfgang Schäuble has also raised the stakes with growing criticism of Greece – a tactic that has proved popular with voters who might otherwise support Germany’s far-right AfD party. Earlier this week Bild, the mass-selling newspaper, stoked passions further by suggesting the German government was warming to the idea of Greece leaving the euro – a notion Schäuble has openly supported in the past.

“Grexit is not our agenda, it is the agenda of those who want the breakup of Europe,” said Sia Anagnostopoulou, a leading Syriza MP and former alternate European affairs minister. “It is what Mr Schäuble wants,” she added, echoing the commonly held view that Athens is hostage to Germany.

Complicating matters further is the direction the IMF will take now that President Trump is in power. In his former role as a billionaire businessman, Trump tweeted that the Greeks were “wasting time” in the eurozone.

Last week, the IMF delivered its gloomiest assessment yet of Greece’s debt burden, arguing that it was not only unsustainable but eventually likely to become “explosive”. The IMF’s board will formally discuss the issue on 6 February but has already hinted that without a commitment of debt relief from the EU it will be unable to contribute further loans. Germany, the biggest contributor to the nearly €300bn of emergency funds assigned to Greece, insists further aid depends exclusively on IMF participation.

Analysts are undecided whether the government is deliberately stalling in the hope of getting a better deal as repayment season approaches and fears of a disorderly default mount, or whether it is playing with fire. Syriza, like every governing party before it, has been hollowed out by the eviscerating effects of having to apply policies that it came to power vowing to oppose. On Tuesday its parliamentary spokesman took Greeks by storm proposing that Grexit be discussed “without taboo” in the 300-member house.

The once unassailable popularity of Tsipras, meanwhile, has been pummelled by the implementation of some of the harshest measures to date and few believe he has the political capital to enforce another round of austerity.

“It is not a can but a bomb being kicked down the road,” said one western diplomat. “In a world where liberal values are under threat we could be looking at a very dangerous scenario where the cradle of democracy also collapses.”

Bereft of growth and battered by cuts and tax increases, Greeks have become poorer and ever more cognizant of their own insolvency in a state where sovereignty exists in little more than name. One in three now live below the poverty line and unemployment hovers around 23%. The latest impasse has not only seen emigration levels rise and non-repayment of household and business loans soar but also nostalgia for the drachma grow.

That is what worries Panagopoulos, the pollster, most. What was once a minority view is changing fast, with the majority of Greeks in a recent Alco survey saying it was wrong to have joined the euro.

“We have become a society that has no hope, not even a slice or piece of hope for the future,” he sighed. “The only reason people want to stay in the euro is because they fear the consequences if we were to leave, but if things don’t get better that will change too.”

Source: Guardian Staff Repòrter in Athens, yesterday.

[Capetonian]

Won't someone please just cut Greece off from the EU and Euro, put them out of their misery, and let them get on with running their country their way.
It worked in the past, it can work again.

[Capetonian]

An article from the DT which explains why Europe is enjoying, an I use the word deliberately, such a resurgence in anti-EU/populist/nationalist parties. It is a trend that is bound to continue until governments start listening to the people, and they won't.

'I hadn't voted for years. Finally, I feel represented.' What I learned from meeting Europe's far-right supporters

Populist parties have gathered momentum across Europe following the Brexit vote Credit: KENZO TRIBOUILLARD/AFP/Getty Images

The heaving crowd I found myself in under the scorching Sicilian sun late last September was edgy, expectant and oh so Italian. Selfie-primed, fake diamond-cased mobile phones glittered all around, while local journalists posed purposefully behind impossibly glamorous sunglasses.

And who was the handsome leather-clad biker who appeared on a purring Piaggio amidst whoops and yells of adulation? No film star or pop idol, I soon discovered, but Alessandro di Battista, a prominent figure in the populist 5 Star Movement - an opposition party but currently Italy’s most talked-about political group.

Why the bike and leathers? Couldn’t he preach in a suit on a stage like other politicians, I enquired? Because, he told me, gesturing to the crowd of admirers, 5 Star was different: “of the people, for the people.” Di Battista’s slogan is not dissimilar to Donald Trump’s rallying cry to 'put America first.’

It’s a sentiment I’ve been exposed to increasingly of late while filming After Brexit: The Battle for Europe. From Sicily I travelled to Brussels, Paris and Berlin meeting the nationalist-minded, anti-establishment leaders taking Europe by storm. The languages may change, but the message does not.

'Au nom du peuple’ – 'In the name of the people’ is the banner under which French populist Marine Le Pen is currently fighting a campaign to become her country’s next president. Once on the fringes of the far right, the National Front party has seen a resurgence in popularity, and she is a leading candidate for the presidential role. Marine, as she likes to be called, has worked hard to cleanse her party of its virulently anti-Semitic, xenophobic image that thrived under her father’s leadership.
"2016 was the year the Anglo-Saxon world woke up – first with Brexit, then with Trump"Marine Le Pen

French voters are no longer ashamed to admit they support the National Front. So does that mean France is lurching to the far right? And that the millions of Europeans now supporting the Danish People’s Party, the Freedom Party in Austria, the Alternative for Germany, the Netherlands’ Party for Freedom and similar movements across Europe are all white supremacist xenophobes? Hardly.

But their party leadership detected yawning gaps in European politics which they’re now successfully exploiting. Take Stockholm, where I met a couple of smartly dressed twenty-somethings at the height of Europe’s recent migrant crisis. There were more asylum seekers per capita in Sweden than any other European country - famed for its liberal values and open society, it was not deemed permissible to openly question immigration.

It was for that reason Jenny and Per were new converts to the far right Sweden Democrats Party. They did not regard themselves as extremists, but the Sweden Democrats was the only political party echoing their concerns at the time, calling for a ban on new arrivals. They had felt voiceless when caught in the country’s political centre.

A few cross-European flights later and I found myself at a fast food stand in Berlin, listening to a heated conversation about what three German office workers deemed the 'umpteenth Greek bailout’. “We have to help,” a middle-aged woman at the table said. “What have those poor Greeks got?” “That’s what I hate about the damned Euro,” exploded her colleague. “We’re FORCED to help. But why on earth should I dig deep into my pockets?”

It turned out that euro-hater Joerg, a computer programmer, was an enthusiastic supporter of the Alternative for Germany party. “Why do Germans have be economically liable for everyone else? “I haven’t bothered voting for years,” Joerg admitted. “But AfD says out loud what I think. Finally I feel represented.”

2017 is election year in Germany and the party has now set its sights on the raging immigration debate. A recent slew of attempted and successful terror attacks and the arrival of more than a million asylum seekers to the country make it impossible to ignore.

“I hate the racist overtones,” a businesswoman in the genteel spa town of Baden Baden told me, “but we can’t continue saying yes to anything and everything European because we’re so desperate to prove ourselves after our dark history. Someone has to say stop. For now that’s the AfD.”

This is how Europe’s populists have been able to storm their way up the public opinion polls. There’s always a part of society that feels ignored, neglected and left behind by the political establishment but the number of angry and resentful voters has exploded in Europe. The 2008 economic crash, with its devastating impact in the Eurozone countries of the south, the bank bailouts, the apparent inability to control the migrant crisis or protect people from a run of terror attacks has left a growing number of Europeans feeling vulnerable and afraid for the future of their families.

During our own Brexit debate, traditional political parties, big business and the European Union were regularly dismissed as detached, self-serving elites. “2016 was the year the Anglo-Saxon world woke up – first with Brexit, then with Trump,” Marine Le Pen told me when we met at her campaign HQ in Paris.

“2017 will be the year of European patriots, Madame. You’ll see.” With upcoming elections in France, Germany, the Netherlands and possibly Italy this year, we soon will. Though their policies vary, a Eurosceptic, anti-immigration and nostalgic nationalist vein runs through all of those moving right.

Yet the stigma of the National Front and Austria’s Freedom Party has led them to claim they are 'neither of the right, nor the left’. They have leftist social policies such as demanding dignity for workers while striking the security-minded tones so popular with the right, but above all, they have launched a marketing drive to entice Europe’s anxious middle classes of the political centre.

Whether these parties are elected to office or not, the rise of Ukip in Britain has shown that you don’t have to be in government to significantly affect national politics if the winds of public opinion are blowing in your favour. I’m not convinced that Le Pen will emerge victorious - more likely is that Europe’s anti-establishment parties will perform so well at elections this year that their shout from the sidelines will become even more influential.

It is that thought which is troubling international bodies from the EU to Nato. Many of Europe’s populists, notably Le Pen, are close to Moscow; they are also admirers of President Trump.

Anti-migrant Geert Wilders, leader of the Netherlands’ Party for Freedom, trumpeted that politics would never be the same again after Trump’s recent victory. A weaker Europe and a fractured, even vanquished European Union would suit Putin and his American counterpart. For protectionist Trump it would open up better trade possibilities. For geostrategist Putin it could make easier his aim to reassert Russian influence over eastern and central Europe.

This is where the explosion of populism in Europe takes on a more global dimension: with much at stake and many nervous of how Trump’s presidency may evolve - particularly after his recent travel ban on citizens from seven countries - voters may be tempted back into the better-the-devil-you-know camp of traditional politics.

There is no telling what might happen: polls are unreliable, accepted wisdom crushed. Europe’s voters are in a volatile frame of mind.