Euro crisis: “Europe will be lucky if it ends up in stagnation like Japan for the next ten years”

Back in Limbo Greece, stage 2 in the 4-stage attempt to form a government with a parliamentary majority ends without agreement – as the BBC notes

Mr Tsipras said he had failed to reach agreement with mainstream parties because of his insistence on rejecting austerity measures demanded by the EU and IMF as part of a bailout deal.

He made the announcement after talks with the Pasok and New Democracy parties, which support the bailout.

Pasok leader Evangelos Venizelos is now expected to try to form a coalition.

But if he in turn fails, Greece could face fresh elections within weeks.

An earlier attempt by New Democracy (ND) leader Antonis Samaras to form a coalition failed on Monday.

The Guardian live-blog has some additional information

…a new tranche of bailout funds scheduled to go to Greece tomorrow will be delivered as planned, according to reports out of the European Financial Stability Facility meeting.

However it is unclear whether the full €5.2bn will be disbursed; the EFSF is discussing a smaller payout as a way of sending a signal to Greece that the bailout is not unconditional.

And, from earlier in the day

New York University economics professor and renowned prophet of economic end times Nouriel Roubini, aka Dr. Doom, says Europe is suffering a “slow motion train wreck” – and the boxcars could be piling up for years.

“Europe will be lucky if it ends up in stagnation like Japan for the next ten years,” Roubini told CNBC. Earlier in the day, Roubini said that Spain could exit the eurozone in three years from now.

No reports on whether he said so through a barely suppressed smile.

Or if he was stroking a white cat at the time…

Update  From today’s, Thursday’s, Guardian Eurozone crisis live-blog

After yesterday’s toing-and-froing, the European Financial Stability Fund has confirmed this morning that it has sent €4.2bn to Greece today. €1bn has thus been held back, while Europe assesses the sitution/puts pressure on Athens.

Klaus Regling, head of the EFSF, said this €1bn would not be dispatched until the IMF, EU, ECB Troika has conducted a visit to Greece, assessed the situation, and agreed Greece’s financial program for the second half of 2012.

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  • Mick Fealty

    Has someone just blinked?

  • Pete Baker

    Well, perhaps. But I still think a return to the polls is the most likely outcome at this point.

    Whether the electorate have greater empathy with the pro or anti bail-out parties’ arguments, and all that entails, remains to be seen…

  • abucs

    Re-distributing income you don’t have is never a comprehensive and sustainable fiscal policy.

  • Greenflag

    The point was made a while back when the Greeks were ‘granted’ the bailout which reduced their debt burden by 50% that even then they would be unable to pay back the international bond holders . It appears that neither the ECB nor the Merkozy Alliance wanted to listen .

    As of now the Greek people are facing into assuming they don’t exit the Euro zone another three years of deep recession following the five they already have endured with the promise of another 10 years of ‘slow growth ‘if any and or hard times and this with 50% youth unemployment , a reducing tax base and a much reduced public sector .

    Even those Greeks who have voted previously for the ‘austerity’ package know full well that no Greek Government certainly not one having to be elected democratically would be able to remain in power long enough to implement such a regime .

    The Greeks have reached the point where they have nothing left to to lose by leaving the Eurozone .

    Whether Portugal or Ireland or Spain will follow Greece into the unknown is probably at this stage what is of most concern to President Hollande and Kanzlerin Merkel .

    We can thank the corrupt US financial services industry and the assemblage of neo con politicians and banksters across the EU for the next upcoming crisis of Anglo American financial services led ‘capitalism ‘.

    And the G 8 and G 20 are still spinning their heels and the banks that were too big to fail are bigger than ever and just as heedless of the havoc they have wrought on tens of millions of lives worldwide as they were in 2007/2008 – And elected politicians everywhere continue to play ostrich in the hope that ‘something ‘ will come up to rescue the west from further relative decline . But with the UK facing increasing unemployment and the USA economy now also facing another period of uncertainty the major beneficiary short term at least of a declining Euro value will be German and other EU exporters.

    Deja vu has returned again and will continue to return whether in Greek or Spanish or Californian mode until such time as the world’s governments ‘unite ‘ on a common policy to rein in the paper money predators of international banking and finance .

  • Pete Baker

    Update From today’s, Thursday’s, Guardian Eurozone crisis live-blog

    After yesterday’s toing-and-froing, the European Financial Stability Fund has confirmed this morning that it has sent €4.2bn to Greece today. €1bn has thus been held back, while Europe assesses the sitution/puts pressure on Athens.

    Klaus Regling, head of the EFSF, said this €1bn would not be dispatched until the IMF, EU, ECB Troika has conducted a visit to Greece, assessed the situation, and agreed Greece’s financial program for the second half of 2012.