TIME Greece

Here’s What Could Happen Next in Greece

No one cares enough to save Greece with their own money

Confused? You should be.

All sides say they still want Greece to stay in the euro, and as long as that’s the case, then there’s always a chance that they will make the necessary compromises.

However, all sides are acting like they would rather Greece were out of it: Greece’s government has made impossible promises about keeping the euro without austerity. The Eurozone’s last offer was a deal that pretended Greece has a realistic future in the currency union without growth. The European Central Bank is pretending that Greece’s banks are solvent, but still refusing to lend them any more money to cover a massive run by depositors.

So where do things go from here?

1. How long can the current deadlock last?

The best guess is still July 20th. This is the day when Greece is due to repay the ECB €3.5 billion. It will miss that payment barring some kind of miracle. On that day, it becomes politically impossible for the ECB to continue making emergency short-term loans to Greek banks. If the ECB won’t take the Greek government bonds as collateral, their value will collapse, and the banks will become insolvent (for supervisory purposes, their current troubles are deemed to be ‘temporary’ liquidity difficulties).

No sensible investor would put new money into a bank in that situation, so you would have to use administrative measures to reduce the banks’ liabilities to a level where they are properly covered by assets. The only realistic ways to do that are to convert deposits into equity, or to “haircut” them. That can either be done by simply writing them down or by redenominating them in a new currency.

2. Is there no hope that the creditors will back off on the demand for austerity?

Actually, yes, there is. The creditors’ red line is to write off part of the money Greece owes them. But they can achieve the same effect by rescheduling the debt so that it’s paid off over a much longer time (say 50 years) and with a long grace period. That way, Athens wouldn’t have to run as tight a budget as is currently being demanded, giving the economy more room to grow. If the economy is growing and the debt level isn’t, then pretty much everybody would be satisfied with that.

But there are a lot of problems even with that. For one thing, Greece is already paying less, proportionately, on debt servicing than countries such as Italy and Belgium (whose coat-tails they would be riding on). For another, it would encourage radicals in other countries, bolstering the kind of tax-and-spend leftism that is anathema to Berlin and the European Commission. And most importantly, growth depends on more than writing debt off. The IMF, which suggested the above idea on debt re-profiling last week, despairs of the Greek government ever reforming enough to generate growth.

3. Will Germany relent?

German press coverage has started to swing against Chancellor Angela Merkel as the risk of breaking up the Eurozone rises (see above), but it’s happening too late to change a groundswell of public opinion bitterly opposed to lending Greece any more money. Merkel herself said that there are “only a few days left” to avoid the worst as she arrived for today’s summit. In that timeframe, she has more to lose politically by caving in to Greece than by refusing them. The most likely outcome is that she will try to spin a “Grexit” as a measure to strengthen the euro’s credibility. The Eurozone’s political elite would dearly like to believe that, but the evil Anglo-Saxon speculators who dominate global finance will take more convincing.

4. Can anyone else stop Greece being forced out?

It’s clear that governments from China to the U.S. are concerned by what could happen if Greece goes (President Barack Obama has called Merkel and France’s President Hollande in recent days to voice those concerns). There will be major market volatility (and China’s are quite volatile enough already), huge question marks over the future direction of the E.U., another slowdown in its economy (the world’s largest), and a failed state right on the front line of a migrant crisis that is a major humanitarian disaster.

Despite all this, no-one (not even Vladimir Putin or Nobel Prize-winning liberal economists) seems to care enough about the Greek state, in its current dysfunctional form, to save it with their own money.

5. Would Greece be better off without the euro?

Who better to ask than the Greeks themselves? A Bloomberg poll last week showed 81% of people wanting to keep the euro, and only 12% wanting a return to the drachma. That’s because a euro is a hard currency, with real spending power. Nobody knows what the value of a currency printed at will by Greek governments would be worth, but Greeks remember the last one well enough to have very serious doubts about it. For more on what a drachma would be worth – read this by Fortune’s Stephen Gandel.

6. So why did Greeks vote ‘no’ at the referendum?

Because the government’s message–that this was about austerity–drowned out the warnings from the rest of Europe that it was actually about keeping the euro. That suggests that Greeks are still suffering from acute cognitive dissonance, believing that they can keep the euro without the conditions that everyone else in the Eurozone says are necessary.

7. Will Greece cave at the last minute?

Maybe. The government has to pay pensions and public-sector wages again at the end of every month, and it will not be able to gather together the euros to do that after July 20th. So at some stage it has to admit who has ultimate control over the supply of euros. At that point, it could accept the creditors’ demands. But so many of Tsipras’ party would rebel that the country will need new elections and a new parliament to have any hope of implementing a new deal. On the bright side, once Tsipras and Syriza are out of power, the European might be more inclined to grant debt relief. Politics is a personal business, after all.

This article originally appeared on Fortune.com

TIME Economy

Why Greece Matters for Everyone

Like it or not, Greece is a domino that will have ripple effects throughout the rest of the world

Greece is a tiny country. It’s 0.3 % of the GDP of the world. Most private creditors took their money out of the debt-ridden nation years ago. So why is the possible exit of Greece from the Eurozone rocking markets? Because it represents what could be the end of the biggest, most benevolent experiment in globalization, ever.

On Sunday, Greek voters said “no” to Europe’s latest bailout offer. That means that a Greek exit from the Eurozone is now very likely–most analysts are putting the odds at somewhere around 60%-70% at this point. For Greeks, the next few weeks will be chaotic. Banks are closed; last week, people could take only 60 euros at a time out of ATM machines, this week it may go to as little as 20 euros. Merchants have begun eschewing credit cards in favor of hard currency as a cash hoarding mindset kicks in.

Global markets are not surprisingly down on the news and will likely be quite jittery for the next few weeks. It’s not that the economy of Greece itself matters so much–China creates a new Greece every six weeks–it’s that a Greek exit from the Eurozone calls into question the entire European experiment. Europe was always an exercise in faith: 19 countries coming together to form a made-up currency without any common fiscal policy or true political integration seemed like a great idea in good times, but was destined to be fragile in bad times.

MORE: Here’s What Greek Austerity Would Look Like in America

The risk now is that a chaotic Greek exit from the Eurozone starts to undermine faith in other peripheral countries, like Italy or Spain. Watch what their bond spreads do over the next few days. If they rise a lot, it means investors are worried. While ECB head Mario Draghi has promised money dumps to help stabilize these nations and any other Eurozone countries that need help (perhaps we should start calling him “Helicoper” Mario), he can’t stop the euro from falling against the dollar, or keep investors from fleeing to “safe havens” like US T-bills. That might be good for US bond markets, but Europe’s crisis could also impact the Fed’s ability to raise interest rates in September, which until quite recently seemed like a sure thing.

No wonder President Obama and Jack Lew are getting vocal about it all–while this isn’t going to be a Lehman Brother’s style domino collapse of financial institutions (private creditors represent only about 12 % of Greek debt; most got their money out back in 2011 or 2012), there’s little question that Europe’s growth will slow, which will affect US companies and workers. The stronger dollar will also hurt US exporters.

But even more important than the short-term jitters are the longer-term economic and geopolitical impacts of the Eurozone crisis. One of the reasons that Russia has been so aggressive in places like the Ukraine is that Europe is perceived as being weak, unable to make the political integrations that would actually solve this debt crisis permanently. (That would require creating a real United States of Europe–something that requires German buy in.)

MORE: Greece Says ‘No’ to Austerity

The Greeks may think that a “no” vote to Europe has increased their power to bargain for a third bailout, but I think it will be very hard to convince German voters of that (and any deal will have to pass through the Bundestag). Germans simply don’t understand why the rest of Europe can’t be more like them, despite the fact that the math doesn’t really work.

If Greece is left on its own, where will it turn for support? To Russia, China, and any number of countries in the Middle East. Suddenly, you’ve got the stability of the Balkans in play. And as it becomes clear that the future of the world’s second largest reserve currency isn’t necessary a given, that could weaken investment in Europe as a whole, throw the Eurozone back into recession, and undermine the EU on the world stage. A political bloc that can’t guarantee its own currency will also have reduced clout in any kind of political negotiation. Europe’s weakness could be very destabilizing at a time when America’s own geopolitical power has ebbed.

That’s bad news for everyone. Europe is one of the three legs of the global economic stool, along with the U.S. and China, which is in the middle of its own debt crisis. America’s recovery isn’t strong enough to pull the world along. Europe’s debt crisis is not only an economic crisis but also a political crisis–one that poses challenges not just the EU itself, but liberal democracy as the model of the future.

MORE: Greek Finance Minister Resigns

TIME Greece

Greek Vote Forces Europe to Make a Difficult Decision

Europe's choice is essentially to give way to Greece or see it leave the Eurozone

Europe’s leaders are faced with a tough choice after Greek voters rejected austerity conditions attached to a new bailout in a referendum on Sunday: fundamentally alter their policies for dragging Europe back to prosperity, or lose a member of a currency union that was meant to represent the political and economic strength of the whole continent.

On Tuesday, leaders of the 19 countries that use the euro will meet in Brussels to grapple with the implications of the referendum result, which saw more than 60% of the Greek electorate vote No to a package of spending cuts and new taxes in return for more loans.

Beyond the economic contagion of a potential Greek exit from the Eurozone, there are lasting political ramifications for all 28 European Union members, regardless of which path they choose.

For an alliance constantly fighting accusations that it is stacked with unelected officials foisting ruinous policies on struggling members, ignoring the will of the Greek people and soldiering on with its tough austerity policies would deal another blow to its democratic credentials. A Greek exit from the single currency would also shatter the dreams of many European leaders who see the euro as the ultimate symbol of the bloc’s political union.

But returning to the negotiating table with Greek Prime Minister Alexis Tspiras and forging a new bailout deal with less stringent conditions could embolden other far-left parities across the E.U. It would also spark a backlash both in richer creditor nations like Germany, and other bailout countries such as Ireland and Portugal that had to endure the pain of reform programs.

Much depends on whose pre-vote bluster wins out. Ahead of the referendum, Tspiras said a No vote would give him a stronger hand in negotiations and he could return to Brussels with a mandate to prioritize social justice and get a better deal for a nation that has endured the highest unemployment rates in the E.U. and a plummeting quality of life.

Eurozone leaders, however, threatened that rejecting the terms on the table after six months of negotiations was a vote for leaving the single currency, and right now the hawks are remaining adamant that Greece has blown its last chance of being part of the euro club.

The German economy minister, Sigmar Gabriel, said that the vote meant Tsipras had “torn down the last bridges across which Europe and Greece could move toward a compromise”. He told the German newspaper, Tagesspiegel, that the vote was essentially a rejection of the Eurozone’s rules.

Slovakia’s Finance Minister, Peter Kažimír, tweeted that he was “disappointed” by the vote and now “the nightmare… that a country could leave the club seems like a realistic scenario”.

That path would begin with the European Central Bank (ECB) cutting off the emergency funding that has kept Greece afloat even after it defaulted on existing loans. Athens would have to start printing its own currency, meaning a de facto exit from the Eurozone. Exactly how the other Eurozone nations would mange this and contain any economic fallout is uncharted territory.

The “Grexit” option would also likely lead to a prolonged depression in Greece and a potential humanitarian disaster. That prospects has some voices around Europe arguing for a return to the negotiating table. Gianni Pittella, the leaders of the Socialists and Democrats in the European Parliament, called for the resumption of talks “inspired by a new attitude of solidarity and cooperation, taking into account the difficult social dimension in Greece”.

The Italian foreign minister, Paolo Gentiloni, also came out in favor of more negotiations, tweeting that “Now it is right to start trying for an agreement again”.

But there is so much bad blood now between the Greek government and its creditors in the Eurozone, the ECB and the International Monetary Fund that a calm and collected round of negotiations seems unthinkable. Talks have been increasingly combative since Tspiras’ far-left Syriza party was elected in January, and his finance minister has accused the creditors of “terrorism”.

The first hurdle is staying afloat for the next few days, and the ECB must now decide whether to continue the emergency funding for Greece while the Eurozone leaders meet.

Whatever happens in the next few days, Raoul Ruparel of the Open Europe think tank said the referendum would bring “profound change”. Either the Eurozone will “capitulate to Greece… changing its entire modus operandi” or Greece will have to leave the Eurozone.

“In which case the E.U. and the Eurozone will be fundamentally changed,” he wrote on his blog. “The E.U. will have to reconsider its ‘ever closer union’ mantra and accept that its flawed approach and inflexible institutions have helped precipitate the downfall of one of its guiding principles.”

TIME World Cup

America, Meet Soccer Star Carli Lloyd, Your Newest Sports Hero

in the FIFA Women's World Cup 2015 Semi-Final Match at Olympic Stadium on June 30, 2015 in Montreal, Canada.
Minas Panagiotakis—Getty Images Carli Lloyd celebrates setting up Kelly O'Hara's goal in the FIFA Women's World Cup 2015 Semi-Final Match at Olympic Stadium on June 30, 2015 in Montreal, Canada.

Her penalty, and perfect pass to second goal-scorer Kelly O'Hara, ensure a crucial U.S. victory in soccer's World Cup

Going into this year’s women’s World Cup, certain U.S. players stole the spotlight. Abby Wambach, the world’s all-time leading international goal scorer, trying to win her first World Cup in the twilight of her career. Forward Alex Morgan, heir to Mia Hamm. Goaltender Hope Solo, for all the off-field controversies.

But step aside, ladies. For this World Cup is now Carli Lloyd’s.

Lloyd, a two-time Olympic gold medal winner making her third World Cup appearance, is no stranger to soccer fans. But for the millions of more casual viewers tuning into America’s quest for its first World Cup since 1999, she’s now a water-cooler fixture. Lloyd has scored a goal in each of Team USA’s knockout-round victories on the way to the World Cup final, which will be played on July 5, when the U.S. will face the winner of Wednesday’s Japan-England semifinal.

Against Germany in Tuesday night’s semifinal, Lloyd’s second-half penalty kick gave the U.S. a 1-0 lead. Later, Lloyd stayed patient while dribbling in the goal box, waiting until Kelley O’Hara was in position to take her perfect pass and boot the insurance goal into the net. U.S. 2, Germany 0.

So America, if you’re not already invested in the World Cup, meet Carli Lloyd. A few quick essentials:

1. Lloyd has a history of shining in big moments: Sports Illustrated put her on the cover of its World Cup preview, with the tagline: “She’s Got Clutch.” No cover jinx in this World Cup — far from it. Lloyd scored the gold-medal winning goals in both the 2008 and 2012 Olympics. All this bodes well for Team USA’s chances on Sunday.

2. Her ex-Team USA coach, Pia Sundhage, dissed Lloyd in a New York Times profile that ran earlier in the World Cup.

“Carli Lloyd was a challenge to coach, by the way,” Sundhage said offhandedly at one point, her fork dangling as she considered Lloyd, who is a top midfielder for the United States. “When she felt that we had faith in her, she could be one of the best players. But if she began to question that faith, she could be one of the worst.”

She took a bite of salad. “It was so delicate, so, so delicate,” she said.

But so, so good. If coaching Lloyd, 32, has been a challenge, it’s certainly been worth any headaches. Lloyd called Sundhage’s comments “confusing.” America and Sweden played to a 0-0 draw during the knockout stage of this year’s World Cup.

3. Lloyd, who grew up in southern New Jersey and attended Rutgers University, credits a lot of her success to training with a former Australian pro player named James Galanis, described by the Wall Street Journal as “paunchy and bespectacled,” and someone who “comes off like a wizard instructor from the Harry Potter films.” Lloyd was supposed to take a ski trip with some friends while she was at Rutgers; Galanis told her if she was serious about making the US team, she had to skip the vacation.

To the cheers of many Americans, Lloyd put in the work. All that’s left is a World Cup win.

TIME Tunisia

Individuals Suspected of Links to the Tunisian Beach Attack Have Been Arrested

British British Home Secretary Theresa May Arrives In Tunisia Following The Terrorist Attack
Jeff J Mitchell—Getty Images Armed guards patrol Marhaba beach during a visit by British Home Secretary Theresa May at the scene where 39 people were killed on June 29, in Sousse, Tunisia.

Authorities are meanwhile attempting to find out if gunman Saif Rezgui had been trained in jihadist camps

An unspecified number of individuals suspected of having links to last Friday’s Tunisian beach massacre have been arrested by Tunisian authorities, Reuters reports.

“We will find all those involved, whether it was just logistical support or not,” Najem Gharsalli, the Interior Minister, told reporters.

Thirty-nine holidaymakers — mostly Britons — were killed when Tunisian gunman Saif Rezgui started firing on the beach by the Imperial Marhaba hotel in Sousse on June 26. ISIS has claimed responsibility for the killings.

Gharsalli didn’t provide details about those arrested, but said that authorities are investigating whether the gunman, who was killed during the attack, had been trained in jihadist camps. “There is a large possibility that he was in Libya for about a month this year for training,” an unnamed security source told Reuters.

Tunisia has been grappling with a rise in Islamist militancy since its recent democratic transition. Over 3,000 Tunisians have joined Islamist militant groups in Syria, Iraq and most recently Libya, Reuters says.

[Reuters]

TIME Germany

Mother of Star Polar Bear Euthanized in Germany

Polar bear Tosca
Kay Nietfield—EPA Polar bear Tosca,the mother of the zoo's famous four-year-old polar bear Knut, shakes off water at Berlin Zoo in 2011.

Tosca was nearly 30 years old

MAINZ, Germany—The mother of Germany’s star polar bear, Knut, was euthanized at the Berlin Zoo Tuesday after animal welfare experts concluded that the aging animal was suffering.

Born in Canada in 1986 and formerly held by communist East Germany’s state circus, Tosca was nearly 30 years old.

“The average polar bear age is between 25 and 30 years, she was very, very old,” zoo spokeswoman Christiane Reiss told NBC News.

“Tosca’s behavior has drastically deteriorated in recent weeks. She is blind, deaf and cannot find her food,” the zoo wrote on its Facebook page after a decision was made

Read the rest of the story from our partners at NBC News

TIME Poland

Women’s-Rights Groups Plan to Deliver Abortion Drugs to Poland by Drone

The move is designed to circumvent strict Polish laws on abortion

Four women’s-rights organizations based in Germany and Poland are planning to deliver WHO-approved abortion pills by drone from Germany to a Polish border town.

The drone will carry the drugs from Frankfurt an der Oder to women across the river in the Polish town of Slubice, in a bid to get around Poland’s restrictive abortion laws

The delivery will also hopefully bring attention to the discrepancy between Poland’s abortion laws and those of other European countries, says one of the organizations involved, Women on Waves.

Poland, a staunchly Roman Catholic country, is one of the few places in Europe where women can only get a legal abortion if there is proof of rape or incest, if the mother’s life is endangered, or if the fetus is severely malformed.

The drugs scheduled for delivery on June 27 are mifepristone and misoprostol. They can be taken without medical supervision for pregnancies of less than nine weeks, Women on Waves says. Inducing miscarriage is not an offense under Polish law.

Women on Waves adds that, since the drone won’t be flying through controlled air space and weighs less than 5 kg, it does not require authorization from the Polish or the German government.

TIME Germany

Al-Jazeera Journalist Detained in Germany to Be Freed

Ahmed Mansour
AP This undated handout photo provided courtesy of Al-Jazeera, shows Ahmed Mansour, 52, a prominent journalist with the Qatar-based Al-Jazeera broadcaster's Arabic service.

Ahmed Mansour was detained in Berlin on an Egyptian warrant

(BERLIN) — Al-Jazeera says its journalist who was detained in Berlin on an Egyptian arrest warrant is being released from custody.

According to the Qatar-based broadcaster, Ahmed Mansour’s attorney said that German prosecutors had agreed to release the 52-year-old journalist on Monday afternoon. He was detained Saturday on an Egyptian warrant at Berlin’s Tegel airport as he tried to board a Qatar Airways flight to Doha.

Prosecutors could not immediately be reached to confirm the report and Mansour’s attorney Patrick Teubner declined to comment.

Mansour, who holds dual Egyptian-British nationality, was convicted in absentia in Egypt on charges that his lawyers and reporters’ groups call politically motivated.

TIME Egypt

Senior al-Jazeera Reporter Ahmed Mansour Detained in Germany on Egypt’s Request

GERMANY-EGYPT-MEDIA-ARREST-JAZEERA
JOHN MACDOUGALL—AFP/Getty Images Supporters of ousted Egyptian Islamist president Mohamed Morsi stage a demonstration to ask for the release of detained Al-Jazeera journalist Ahmed Mansour in front of the local court of Berlin's Tiergarten district, where Mansour is being held in custody on June 21, 2015

Protesters are demanding the 52-year-old's immediate release

Ahmed Mansour, a presenter for al-Jazeera’s Arabic-language channel, has been arrested in Berlin at the request of the Egyptian government.

The New York Times says it’s the first time a Western government has acted to comply with one of Egypt’s many extradition requests. An extradition hearing will take place on Monday, according to the BBC.

In 2014, Mansour was sentenced to 15 years in prison in absentia by an Egyptian court. The 52-year-old Egyptian national was convicted of torturing a lawyer during the 2011 Tahrir Square uprising. He denies the charges.

Mansour was arrested at Tegel airport in Berlin as he boarded a flight to Qatar, where his employer is based. Since former Egyptian President Mohamed Morsi was ousted in 2013, al-Jazeera has been critical of the current government, headed by Abdul Fattah al-Sisi, the New York Times reports.

Protesters gathered outside the facility where Mansour is being held on Sunday to demand his release.

“It is quite ludicrous that a country like Germany would enforce and support such a request made by a dictatorial regime like the one we have in Egypt,” Mansour said in a video he recorded while in the Berlin prison.

TIME Germany

Artworks by Hitler Sell at German Auction for Nearly $450,000

adolf hitler painting
Christof Stache—AFP/Getty Images The signature reading 'A Hitler, 1910' at the watercolor "Nelkenstrauss" (carnation bouquet) is pictured, on June 11, 2015 in the Weidler auction house in Nuremberg, southern Germany.

His art can be sold in Germany as long as there are no Nazi symbols

Fourteen paintings and drawings by Adolf Hitler have been controversially auctioned off in Germany for about $450,000.

The pieces sold at the Weidler auction house in Nuremburg included a painting of the Bavarian fairytale castle Neuschwanstein, views of Vienna buildings and a female nude, The Guardian reports. Weidler said the bidders were investors from China, France, Brazil, Germany and the United Arab Emirates.

Germany has no restriction on the sale of Hitler’s artwork as long as the pieces don’t show Nazi symbols. While many have criticized the auctions, some collectors of Nazi memorabilia say their interests are historical.

[The Guardian]

 

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