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Debt crisis: years of Greek recession take their toll as election looms - Daily Telegraph
His struggle to make ends meet exemplifies the plight of Greeks mired in a fifth year of recession. Yesterday the official unemployment rate rose to a record 22.6 per cent in the first quarter. But the hungry civil servant's attitude towards the general election on Sunday also typifies the polarized nature of the national debate.
The race has boiled down to choice between a coalition led by either New Democracy, the conservative establishment party, or Syriza, an insurgent Leftist coalition.
Vangelis will support the latter, as he did in a May 6 vote, when Syriza stunned the whole of Europe by coming second and then confounded attempts to form a national unity government, so requiring Sunday's fresh election. New Democracy, however, led narrowly in the last public opinion polls before they closed on June 2 under Greek law. Private polling since has shown a similar trend.
The stakes could hardly be higher. The vote has been presented as a de facto referendum on Greece's membership of the euro because of the pledge by Alexis Tsipras, Syriza's 37-year-old leader, to revise the second memorandum of understanding between and international institutions and lenders, which contained the toughest austerity measures and brought riots to the capital's streets.
His demands include a three to five year moratorium on Greece's interest payments, a rapid recapitalisation of the country's banking system and a restoration of unemployment benefit and the minimum wage to pre-crisis levels - reforms that were required by the memorandum.
Though Mr Tsipras has given himself some wriggle room, by not committing to a unilateral cancellation of the agreement, his critics claim that his demands would be so inflammatory that Berlin and Brussels would soon give up on the Greeks. The next tranche of Greece's bailout funding would then be withheld, so hastening its exit from the euro.
Officially, Mr Tsipras is committed to staying in the currency, though the same cannot be said for all the members of his coalition. But his gamble is that German leaders are bluffing when they say that a Greek exit from the euro would be manageable.
Like many Greeks, he reckons that although his country is small enough to represent just two per cent of the eurozone's output, it is big enough to be the first domino that starts the collapse of the single currency.
He is hoping that supposed disillusion in Europe with austerity will work in his favour and loosen the creditors' grip on the Greek economy.
"Tsipras is trying to convince people that we can stay in the euro with him in charge," said Spiros Rizopoulos, head of Spin Communications, a consultancy in Athens. "But if he thinks Angela Merkel is going to back down – well, he can say that, but I can say I am Brad Pitt, but am I am not Brad Pitt."
Greek bank shares rose 19pc yesterday, bucking European trends on market talk that broadly pro-bailout parties are likely to prevail on Sunday.
But few people will vote with enthusiasm for New Democracy. Its 61-year-old leader Antonis Samaras is seen by many Greeks as part of the corrupt old guard responsible for what Wolfgang Schaeuble, the German finance minister, this week called "decades of economic mismanagement".
Though Mr Samaras says he wants to renegotiate the memorandum, his demands would be minor compared to those of his rival Mr Tsipras.
Neither however has presented a convincing vision for rebuilding Greece's sclerotic bureaucracy and lack of competitiveness.
Forex: USD/JPY hovers above 79.20 - FXStreet.com
Forex focus: European unity may lie ahead – but for how many? - Daily Telegraph
As HiFX’s Chris Towner says: “Germany is being forced into a corner where it is they who will need to start to give up if they would like Europe to become more unified. The Spanish finance minister is right to say that the battle for the euro will be waged in Spain, but it will be decided in Germany.”
Eurosceptics suspect Germany will use the crisis to usher in a United States of Europe.
“Is there a hidden German agenda? Probably not,” answers Charles Purdy of Smart Currency Exchange. “They have always thought and made clear that greater fiscal unity is a must for the euro – ensuring that each country adopts their fiscal discipline. Up to now the political will has been lacking but if the euro is to survive and the 'weaker’ countries are to benefit from Germany’s strong credit rating then fiscal union will be what Germany expects.”
World First’s chief economist Jeremy Cook believes greater unification will take decades, saying: “Fiscal union is the endgame for the eurozone – a United States of Europe that has centralised fiscal and monetary policy and leadership based from one location. This will take years to set up and will only follow a huge upheaval of the European political landscape.”
However, while the consensus view is that the eurozone will bind closer together, this doesn’t mean that all 17 members will remain in the club.
“It is becoming increasingly clear that some nations can’t remain in the eurozone,” says Richard Driver of Caxton FX. “A stronger eurozone with a fiscal union is the only way the eurozone can survive but this won’t come soon enough for Greece.”
Stephen Hughes of Currencies.co.uk is sceptical, saying, “As a growing number of voices call for greater fiscal union across the eurozone, it’s still by no means a given that this is an achievable path – don’t forget that even the German people have yet to ratify the fiscal compact.
“But, given the depth of the current euro crisis, we are likely to see a more accommodating stance from policymakers in the coming months. What is clear is that any move to greater unity will take time to implement, something Greece certainly doesn’t have. As for Spain, Portugal and Ireland, the jury’s out for them...”
Debt crisis: 'possibility for further Moody's action on Spain' - Daily Telegraph
Professor Pablo Triana, from Spain's ESADE Business School, warned that this may not be the end to Moody's action on Spain.
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