Hugo Dixon: Greece needs a second election 25 May 2015 Most scenarios facing the country are bleak, but there is one outcome that is not too bad. This will require the prime minister not only to eat his words, but also to call a new election to get a fresh mandate. The timing is tough, but just doable.
Debt extension could help Syriza but hurt Greece 22 May 2015 Europe could split off payments owed to Greece from its second bailout, according to reports. The move could break an impasse over reform talks and avoid a messy default. Yet Europe would have less leverage over the Syriza-led government and the Greek economy would suffer.
ECB can live with bankrolling Greece 19 May 2015 Athens’ borrowing from the European Central Bank has Germany’s Jens Weidmann fretting over euro zone rules that prohibit monetary financing. The ECB’s guilt depends on the severity of its judge. In the real world, its pragmatic approach looks defensible and effective.
Athens and Europe should rethink their Greek myths 15 May 2015 Both debtor and creditors are telling tales which leave out key facts. The incomplete and incompatible narratives make agreement on the next bailout harder, and the risk of a crisis greater.
Hugo Dixon: Greece seemingly has no Plan A or Plan B 11 May 2015 It owes around 324 billion euros. The government doesn’t seem to have a credible plan for reaching agreement with its creditors. Nor does it appear to have thought out how to default while containing the collateral damage.
Greek bargaining position stronger than it looks 22 Apr 2015 Athens may well not repay its ECB debt by July. But things would only get really nasty – via capital controls and bust Greek banks – if member states deem this a hard default. If they choose to, Greek leader Alexis Tsipras could blame them – and lead his country out of the euro.
Euro zone needs to reinforce its founding myth 21 Apr 2015 The single currency is supposed to be irreversible. Yet European policymakers regularly conjure up the risks of Greece’s euro exit. No wonder potential Greek IOUs elicit vastly divergent reactions to actual Californian ones. This difference suggests how the euro zone can change.
Grenada offers debt restructuring model for Greece 9 Apr 2015 The Caribbean island is close to agreeing a deal with creditors after years of wrangling. The deal structure, including warrants and phased debt relief, is equitable, and provides incentives for reform. It looks like a decent model for Ukraine—or even Greece.
Europe’s scars from Greece would run deep 7 Apr 2015 Warren Buffett is among those who reckon a Greek exit could make the euro zone stronger. Losses are manageable, other countries won’t follow immediately, and the shock may even prompt excess debt to be tackled. But political and economic tensions would be dangerously magnified.
Hugo Dixon: Greece has two weeks to produce red meat 7 Apr 2015 The default scenario is off the table for the time being after Athens confirmed it would meet a payment to the IMF on April 9. But it will probably be back by late April if Greece doesn’t come up with some serious reforms on pensions, tax and banking.
Greece comes kicking and screaming to reform table 2 Apr 2015 The Syriza government’s latest reform proposals include some concessions to its public creditors. The plan still lacks detail, and reneges on past promises. The government is fiddling while Athens burns, and the risk of an accidental euro zone exit is rising.
Hugo Dixon: Tsipras needs rupture with far left, not Brussels 30 Mar 2015 Even if Greece avoids imminent default, its prime minister will have to break with radical allies before Athens’ position in the euro zone is secure. It is not clear he has the courage to do so. But such a move would make far more sense than a break with euro creditors.
ECB torn between two roles in Greek bank support 20 Mar 2015 The central bank’s monetary policy wing has delayed a plan by its supervisory arm to legally stop Greek banks increasing their stocks of illiquid assets. The stability-searching supervisors have the right idea. But the policy group has an even higher political responsibility.
Hugo Dixon: Is the ECB being unfair to Greece? 11 Mar 2015 The new left-wing government complains the euro zone central bank is meting out tougher treatment than it gave the previous right-wing administration. The difference is justified since Athens isn’t working well with its creditors. If that changes, the ECB should be more flexible.
Hugo Dixon: Greece has no good Plan Bs 9 Mar 2015 Defaulting on its debts and quitting the euro would be a disaster. So would imposing capital controls, while defaulting and staying in the single currency. Athens has no rational course of action apart from working with its creditors to vigorously reform its economy.
Greece’s U-turns have only just begun 2 Mar 2015 Last week the new government asked for an extension of the old bailout programme, despite pledging to rip it up. If Greece is to avoid going bust, it will have to make three more somersaults in coming months. The faster it does them the better.
Europe can afford to cut Greece some slack 27 Feb 2015 Athens wants to slice its primary fiscal surplus to one-third of the level agreed in its current bailout programme. That might leave debt too high for comfort – yet there is room for a compromise that Greece’s euro zone partners could afford.
Reforms helping Greece might hurt Syriza 24 Feb 2015 The reforms agreed by Athens are both ambitious and fuzzy. They tick some of the favoured boxes of hawks in Germany and elsewhere. But Syriza’s election pledges are in tatters. Europe may be better off - but the domestic situation in Greece has become more volatile.
Hugo Dixon: Time for Alexis Tsipras to keep his nerve 21 Feb 2015 The new Greek PM has crossed a Rubicon in asking for an extension to the country’s hated bailout programme while abandoning many election promises. Tsipras should realise there is no turning back. But he can snatch victory from defeat if he embraces radical reforms with vigour.
Greek wordplay paves way for bigger U-turn 19 Feb 2015 Greece’s leader Alexis Tsipras has made his first concession. His government promises to extend the bailout with European creditors and accept temporary troika supervision. Yet the wording is nebulous and commitment to reforms weak. He will need to give more ground.