Opinion – Debt relief or a fourth financial assistance programme for Greece? | Bruegel

This is an excellent article from European think-tank, Bruegel. It argues that the Eurogroup faces a difficult choice on Greece — implementing a debt reduction plan drastic enough to make a return to market borrowing possible, or agreeing to a fourth financial assistance programme and continuing to fund Greece at the preferential lending rate.

Source: Debt relief or a fourth financial assistance programme for Greece? | Bruegel

Greek debt is an emotional subject, depending upon your perspective. It’s necessary to perhaps examine some of the history. German and French banks loaned vast amounts of money to Greece, based on questionable commercial assumptions. Throughout, German and French banks have been protected from taking write-downs on the loan portfolio – emergency assistence came in the form of soft loans from the the Eurogroup. But the loans contained stringent terms on Greece that brought Greece to her knees, with widespread, unemployment, suicide and collapsed governments. It’s important to remember that the situation was triggered by the articial rules to support the Euro post the financial crash of 2008. Germany has consistently refused to inflate her economy, which has triggered widespread erosion in living standards in many Southern European countries.

Still today the real challenge remains the Euro.

Greece has been promised debt relief before but it failed to materialize because of powerful lobbying from German and French banks. Now France has a new president in Macron and we must see if he’s ready to reach our a helping hand to a fellow European country.

I hope that Greece gets a measure of debt relief but I fear not.


France’s Rise and Britain’s Demise – Carnegie Europe – Carnegie Endowment for International Peace

English: The Carnegie Endowment for Internatio...

English: The Carnegie Endowment for International Peace located at 1779 Massachusetts Avenue, NW in the Dupont Circle neighborhood of Washington, D.C. (Photo credit: Wikipedia)

This is a thoughtful article from international think tank Carnegie Europe. It argues that while Britain’s prime minister ushers in the decline of London’s influence in the world, France’s president seeks reforms that will reassert Paris’s role in the EU.

Source: France’s Rise and Britain’s Demise – Carnegie Europe – Carnegie Endowment for International Peace

The article is a good read and reflects current opinion, post elections in both France and the UK.

BUT the article oversimplifies strategy. The first step in strategic analysis is a ‘position audit’.

Well, the UK is fully reformed and currently open to global competition. Meanwhile, France is unreformed with labour practices that constrain French growth and collective prosperity.

Secondly, the article oversimplifies the political realities of the EU and the Euro which have spawned Brexit. In a drive to prop up the Euro to Germany’s advantage, other countries have been rationed in  fiscal strait-jackets, triggering austerity, unemployment and poverty. The EU is seen as part of the problem not the solution – this is across Europe not just in the UK.

What matters I suggest is the ‘national stomach’ for radical change.

I sense that whilst France is happy to give Macron their patronage for now, they will baulk at painful reforms and Macron will impale his presidency, just like his post-war predecessors.

Meanwhile, stellar UK citizens are fed up with austerity and are likely to become increasingly angry with the heavy economic consequences of Brexit.

For sure, both countries are on new trajectories. Whilst there will be little convergence, there will always be important touch points to mutual advantage, like defense and on the global stage.