Hard-hit online lender CAN Capital makes executive changes

The biggest online lender to small businesses in the US has pulled down the shutters and put its top managers on a leave of absence, in the latest blow to an industry grappling with mounting fears over credit quality. Atlanta-based CAN Capital said on Tuesday that it had replaced a trio of senior executives, after […]

Continue Reading


BoE stress tests: all you need to know

The Bank of England has released the results of its latest round of its annual banking stress tests and its semi-annual financial stability report this morning. Used to measure the resilience of a bank’s balance sheet in adverse scenarios, the stress tests measured the impact of a severe slowdown in Chinese growth, a global recession […]

Continue Reading


Zoopla wins back customers from online property rival

Zoopla chief executive Alex Chesterman has branded rival OnTheMarket “a failed experiment”, and said that his property site was winning back customers at a record rate. OnTheMarket was set up last year, aiming to compete with Zoopla and Rightmove, the UK’s two biggest property portals. It allowed estate agents to list their properties more cheaply […]

Continue Reading


Asia markets tentative ahead of Opec meeting

Wednesday 2.30am GMT Overview Markets across Asia were treading cautiously on Wednesday, following mild overnight gains for Wall Street, a weakening of the US dollar and as investors turned their attention to a meeting between Opec members later today. What to watch Oil prices are in focus ahead of Wednesday’s Opec meeting in Vienna. The […]

Continue Reading

Banks, Financial

RBS emerges as biggest failure in tough UK bank stress tests

Royal Bank of Scotland has emerged as the biggest failure in the UK’s annual stress tests, forcing the state-controlled lender to present regulators with a new plan to bolster its capital position by at least £2bn. Barclays and Standard Chartered also failed to meet some of their minimum hurdles in the toughest stress scenario ever […]

Continue Reading

Categorized | Economy

Greece’s debt crisis looks familiar

Posted on April 22, 2016

Farmers demonstrate outside the Greek parliament during a protest against pension reform and tax issues, on February 12, 2016.
Fears that Greece will exit the eurozone, a "Grexit", could revive if Greek authorities do not come up with "credible" reforms, notably on pensions, a senior IMF official said February 11. / AFP / ARIS MESSINIS (Photo credit should read ARIS MESSINIS/AFP/Getty Images)©AFP

While Europe’s political class has been consumed with preventing refugees from entering the EU and Britain from exiting, the mother of all EU crises has slowly and quietly been gathering steam again: Greece.

Eurozone finance ministers will meet on Friday after yet another round of fruitless talks in Athens where almost nobody agreed on the way forward.

And just like the Greek crisis that gripped the EU last year, there is a hard stop arriving very soon: unless Athens receives its next round of bailout aid, it risks defaulting on €3.5bn in debt payments in July, raising anew the agonising prospect of Grexit.

Why Greece and bailout monitors are at loggerheads again

Greek prime minister Alexis Tsipras

There are questions about whether the IMF will stay in the programme at all

How could this be happening again?

After a series of increasingly desperate summits nearly a year ago, EU leaders agreed an €86bn bailout that pulled Greece back from the brink. Just months later, a chastened Alexis Tsipras, the far-left prime minister who made his political bones railing against two similar EU rescues, won re-election promising to implement the harsh fiscal measures included in a third programme.

European Commission officials were touting Mr Tsipras as a changed man; shorn of his ornery finance minister Yanis Varoufakis, Brussels convinced itself that the long-time radical had transformed into a diligent economic reformer.

    But they overlooked the political realities in Athens — not to mention the financial realities of the bailout.

    In fact, last summer’s deal was less a cure-all for Greece’s economic woes than a collective kicking of the can down the road. It avoided default by loaning Athens €13bn very quickly in exchange for a narrowly focused set of pension and tax reforms.

    Even then, much of the heavy lifting was put off until the new programme’s first quarterly review — including the politically combustible issue of debt relief. As if to underline how ephemeral the deal was, the International Monetary Fund made clear it was not participating and would put off any decision on whether to join until it was certain Mr Tsipras, who had become the first leader of a developed country to default on an IMF payment, would live up to his commitments.

    That first quarterly review has now stretched into two additional quarters, and the three-dimensional stand-off between Athens, Berlin and the IMF has only deepened.

    While the IMF has demanded a restructuring of Greece’s debts, Germany has suddenly decided that no debt relief is needed at all. Still, it has insisted the IMF participate anyway.

    Meanwhile, the IMF has decided the agreement reached in July was badly constructed and should have lower budget surplus targets.

    As for Mr Tsipras, he has returned to an angry, defensive crouch, railing against outside forces.

    There is little political capacity in Athens to push through additional reforms or spending cuts even if Mr Tsipras wanted to.

    “Europe’s politicians have been distracted with other challenges and markets have become complacent about the inherent risks in Greece’s new bailout,” said Mujtaba Rahman, head of European analysis at the Eurasia Group risk consultancy. “But if Berlin doesn’t revise its approach, this is going to blow up in everyone’s faces.”

    Greece has defied doom-mongers — now the IMF must do its bit

    People look at goods at a shop in central Athens on August 22, 2013. ECB board member Joerg Asmussen said Wednesday that Europe would consider additional aid to Greece if Athens makes progress on cutting its budget deficit and meets all the terms of its bailout deal. .AFP PHOTO / LOUISA GOULIAMAKI (Photo credit should read LOUISA GOULIAMAKI/AFP/Getty Images)

    After six years of recession, we are laying the foundations for recovery, writes Alexis Tsipras

    The players, the arguments and even the choreography have changed little since last year. But the consequences of failure may have.

    A year ago, EU leaders felt confident they had ringfenced Greece and that a Grexit, while severely damaging to the Greek economy, would have little impact on the rest of the eurozone.

    Now, however, they are deeply worried about the prospect of a failed EU member state with 50,000 Syrian, Iraqi and Afghan refugees stuck in deteriorating camps — a state the rest of the bloc is looking to as a front line against the influx of migrants into Europe.

    And then there’s Britain. Senior EU officials are acutely aware that another ugly Greece fight just as Britons go to the polls on June 23 to decide on whether to stay in the EU would not help their cause. One official involved in the talks said Euclid Tsakalotos, the Greek finance minister, has been warned to wrap up a deal by the end of May — or be ready for radio silence until June 24.

    In the end, these pan-European political realities make another Greek agreement all the more likely. But that does not mean it will be pretty.