The Greek Austerity Myth

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HEADLINES

German Spokesman: Greek Agreement In Eurogroup Meeting Is Unlikely

ECB's Jazbec: Greece ELA Could Stop If Risks Emerge

Varoufakis: If Debt Can No Longer Be Paid Off, That Leads To A Haircut

EU's Schulz Says Greek Approach Reflects 'Inexperience'

Greece, OECD Agree To Work Together On Reforms

Greek Deputy FinMin Says There Is EU Willingness For A Deal

DIHK Boosts 2015 German Growth Forecast On Low Oil Price, Euro

China PBOC To Expand Standing Lending Facility Nationwide

Kuwait Oil Minister Says Oil May Reach $60 By Year-End - Newspaper

Portuguese HICP Falls More Than Expected In January

Time Warner Beats By $0.04, Misses On Revenue

PepsiCo To Return Up To $9 Bln As Profits Surprise

Glencore To Divest 24% Stake In Lonmin

After Paying Off Dutch State, ING Declares Dividend

VW Expects Tough Year After Europe, China Slip In Jan Sales Drop

Greece No Longer Discussing Piraeus Port Sale - Govt Spokesman

COMMENTARY

Eurogroup Meeting On Greece (11 Feb 2015)

Finance ministers from across the Eurozone will hold a meeting on Wednesday (February 11) in an attempt to reach a decision over the Greek debt stand-off; the meeting comes ahead of talks between EU leaders on the issue the following day.

The new Greek government is a coalition between Syriza and the right-wing Independent Greeks Party; Syriza hold the majority of power, and have little in common with their coalition partner aside from fierce opposition to austerity measures in Greece.

Syriza surged to power with pledges to end austerity and renegotiate the countries debt deal. New PM Alex Tspiras had pledged to write off most of Greece’s EUR 320bln debt, tie the repayment of existing debt to economic growth and impose a “significant moratorium” on debt payments.

For The Third Time In A Century, America Will Have To Ride To Europe's Rescue

It would be the third time in a century. Will America once more end up having to save the fratricidal Europeans from themselves? In Washington, there is a sense of events spiralling out of control, and of again getting drawn into Europe’s centuries old propensity to self destructive madness.

The EU’s evident inability to contain the geo-political ambitions of Vladimir Putin may be the most visible of America’s latest concerns, but the more immediate danger centres on the stand-off with Greece, which grows uglier by the day. Greece’s latest overtures to the Russians make the situation seem more alarming still

Tuesday's apparent olive branch from Greece’s celebrity finance minister, Yanis Varoufakis, is in truth no compromise at all, despite the evident relief it brought to financial markets; it was merely the same demands dressed up in more acceptable language. Speculation of a six month programme extension was also fast slapped down by the German finance ministry. (Telegraph – Continue Reading) [27]

1 in 2 Germans Want Greece Out

Every other German is in favor of Greece leaving the euro zone, according to a survey recently conducted by the Focus agency.

The survey revealed 48% of Germans would support a potential "Grexit" while 29% of respondents said they preferred Greece keeping the euro, with 23% undecided.

Looking into the details, most of the Grexit-supporters belonged to the Eurosceptic Alternative for Germany (AfD), with 82% of its followers responding in favor.

Center-right voters were 47% in favor of Greece leaving, while 43% Social Democrats felt the same. A majority of supporters of the Green party, Left party and the liberal FDP were for Greece remaining in the 19-nation bloc. (WBP Online – Continue Reading) [28]

The Greek Austerity Myth

Since the anti-austerity Syriza party's victory in Greece's recent general election, the “Greek problem" is again preoccupying markets and policymakers throughout Europe. Some fear a return to the uncertainty of 2012, when many thought that a Greek default and exit from the eurozone were imminent. Then as now, many worry that a Greek debt crisis could destabilize – and perhaps even bring down – Europe's monetary union. But this time really is different.

One critical difference lies in economic fundamentals. Over the last two years, the eurozone's other peripheral countries have proven their capacity for adjustment, by reducing their fiscal deficits, expanding exports, and moving to current-account surpluses, thereby negating the need for financing. Indeed, Greece is the only one that has consistently dragged its feet on reforms and sustained abysmal export performance. (Project Syndicate – Continue Reading) [29]

Federal Reserve Works To Cultivate Stronger Ties To GOP

As the Federal Reserve prepares to begin raising interest rates later this year, it is readying for what may be another big challenge in 2015: the shift to a Republican-controlled Congress.

The Fed’s only Republican governor, Jerome Powell, has begun making the central bank’s case to the GOP, in public and private, against proposals Fed officials say could limit its independence. And the bank has hired and promoted Republicans within its Congressional Liaison Office since the November midterm elections, when the GOP won enough seats to take control of the Senate from the Democrats and expand its House majority.

It is unclear whether these efforts will overcome the perception among many Republicans that the liaison office, which lobbies for the bank’s interests on Capitol Hill, has in recent years been too closely aligned with Democrats, and hasn’t done enough to cultivate relationships within the GOP, according to current and former Hill staffers and financial-industry lobbyists. (WSJ – Continue Reading) [30]

Apple Becomes World's First $700 Bln Company

Apple became the world’s first $700bn company last night as rapid growth in China and hopes for bumper sales of its forthcoming Apple Watch pushed the iPhone and iPad maker to new heights.

The shares rose 1.9pc to $122.02 at the close in New York, giving the electronics valuing the company at $710.7bn (£465.8bn).

The valuation means Apple is almost twice as large as oil major Exxon Mobil, the world’s second largest company by market capitalisation. Exxon has seen its value tumble to $385.4bn since last summer amid falling oil prices. (Telegraph – Continue Reading) [31]

DATA

Portuguese CPI (YoY) Jan: -0.40% (est -0.40%; prev -0.40%) [32]

Swedish PES Unemployment Rate Jan: 4.40% (est 4.40%; prev 4.30%) [33]

GOVERNMENT/ CENTRAL BANK NEWS & COMMENTARY

ECB's Jazbec: Greece ELA Could Stop If Risks Emerge [34]

Greek FinMin Varoufakis: If Debt Can No Longer Be Paid Off, That Leads To A Haircut [35]

Greek Deputy FinMin Says There Is EU Willingness For A Deal [36]

Greece, OECD Agree To Work Together On Reforms [37]

German Chancellor Merkel To Attend Ukraine Talks In Minsk - Sources [38]

DIHK Boosts 2015 German Growth Forecast On Low Oil Price, Euro [39]

BoJ's Kuroda Signals Confidence On Easing With No G20 Backlash On Yen [40]

GOVERNMENT/ BOND NEWS & COMMENTARY