The resignation of Prime Minister Tsipras is good economic news for Greece and for Europe. The odds are good that new elections will bring a more competent and pro-European government into power. This will improve the prospects for a successful third program and thereby for more economic growth. … [continue reading]Read more
Perhaps the greatest damage caused by the confrontation with Greece is a general loss of confidence. If we want to get Greece back to growth, people, companies and investors have to regain confidence in the viability of the country. For this to work, a legitimate and competent government as well as an efficient administration and judiciary are essential. Yet the issue of debt sustainability is … [continue reading]Read more
The ECB has sent a strong signal of trust in the implementation of a third program by increasing its ELA support to Greek banks. The ECB underlines that it considers Greek banks fundamentally solvent. Mr. Draghi is optimistic that a bridge financing will be in place to cover Greek repayments to the ECB on 20 July.… [continue reading]Read more
This article was published on ft.com on June 29, 2015.
The breakdown of negotiations on Greece has come as a shock. Berlin and other European capitals look in disbelief at the Greek government’s resolve to inflict huge economic and financial damage on its own country and its citizens […] read full article on ft.com… [continue reading]Read more
The Greek tragedy must not go on. Europe’s growing frustration with the new Greek government has triggered calls for stopping negotiations and even accepting “Grexit”, Greece’s exit from the euro. We believe that this would be a mistake. Grexit would be a collective political failure. Above all, it would cause a social and economic catastrophe for Greek citizens.
However, keeping Greece in the euro … [continue reading]Read more
The Greek government yesterday proposed the transformation of part of its official debt into GDP-linked bonds. DIW Berlin has published a detailed study, which analyses how such an instrument might work. DIW Berlin considers this proposal as a constructive option to improve debt sustainability, which will ultimately foster a return to economic growth. Such a solution will help Greece accept ownership of its reform prorgramme – which is the key for a sustainable recovery of the economy. It is … [continue reading]Read more