(CNN) – Global investors inhaled deeply when Greek President Karolos Papoulias relayed a difficult call with the head of the nation’s central bank - since Monday, Greeks pulled around 800 million euros (around $1 billion) out of the nation’s banks.
"There is, of course, no panic, but there is fear that could develop into panic," Papoulias said, describing what Central Bank Governor George Provopoulos told him. "He also said that the strength of banks is very weak at the moment."
So how much money is in the Greek banking system? About 170 billion euros (more than $216 billion) at the end of March, according to the Financial Times.
Since 2009, about 25% to 30% of Greek deposits have left the country. That’s not good for Greece, but given the turmoil of the past two years, it certainly could be worse.
London (CNN) – So far, the markets have taken the elections in Greece and France in stride. And why not? What has changed?
France helped broker the so-called Fiscal Compact, which is at the heart of closer integration in Europe. Does France now want to pull away from the eurozone and allow Germany to take all the decisions? Of course President-elect Francois Hollande would not want that.
(CNN) – With the election of Francois Hollande as the president of France and a Greek poll dealing a major blow to the coalition government in Athens, voters in Europe are pushing back on austerity.
"I asked for a strong mandate, but people chose differently. I respect their message," Greece’s New Democracy party leader Antonis Samaras said late Sunday. "Today's result expresses people's disappointment towards the implemented dead-end economic policy that tested their limits and didn't include the necessary development policy."
Meanwhile, French voters gave victory to the nation’s first a left-wing president since Francois Mitterrand left office in 1995. "Austerity can no longer be something that is inevitable," President-elect Hollande said.
Both elections have shaken the markets, which yet again are faced with uncertainty about the fate of the eurozone. Will a new coalition government adhere to the agreements that kept the fragile Greek economy part of the eurozone, or will political forces place Greece’s membership among the euro nations once again in doubt? “This could be the start of another deeply uncertain period in Greece with consequences far beyond its borders,” observed CNN correspondent Matthew Chance in Athens.
London (CNN) – As French and Greek voters head to the polls this weekend, some property owners across the Channel will be rubbing their hands with glee.
The reason: a robust real estate market in London's most exclusive areas which have become a safe haven for eurozone investors keen to preserve family fortunes and avoid tightening tax regimes back home.
A favorite to win France's presidential elections on Sunday, Socialist Party leader Francois Hollande once quipped that he didn't like "the rich." Among his key policies: a 75% income tax band for the wealthiest citizens, which experts say will exacerbate an exodus already underway.
London is home to an estimated 300,000 French expatriates, often earning it the nickname “Paris-upon-Thames.”
London (CNN) – Many of Europe’s best economic minds have been searching for a radical solution to the European debt crisis.
The troubled area's biggest hitters - from the former head of the European Central Bank, Jean-Claude Trichet, to Jose Manuel Barroso of the European Commission - have all failed to prescribe a remedy to the problems facing the single currency.
London (CNN) – Investors holding insurance to protect against Greece defaulting on its debts will collect just over $2.5 billion after an auction of the country’s bonds found their value to be 21.5 cents in the euro.
The payout gives relief to those who have long bet the country will be unable to pay its bills. Greece has avoided that outcome for months as it continued to be buffered by loans from the eurozone’s bailout fund and the International Monetary Fund.
A default, triggering payment of the insurance - or credit default swaps - was finally called after the country forced its creditors to take massive cuts in the value of their investments as part of a debt swap.
That so-called “credit event” was therefore tripped by a restructuring of the country’s debt, rather than straight non-payment.
The price was reached after an auction in which the country’s bonds - including new ones held by investors who participated in the debt restructuring - were traded by banks to find a price.
Those holding the credit default swaps will now be paid out 78.5 cents on the euro to close out the contracts.
Market participants said the auction went largely as expected, despite quirks created by the country’s debt restructuring.
One observer said the auction was essentially a “washing up” of the restructuring. One takeaway, he added, was that the “political furore” around credit default swaps - once held up by politicians as a highly destabilizing influence in the financial markets - had died down.
London (CNN) – The bail-out is a done deal, the International Monetary Fund has agreed its share and the Europeans have started to hand over the money. One of the ratings agencies has even upgraded the new Greek bonds.
So it is incredibly dispiriting to be reading more and more notes from economists and analysts suggesting that this is not over yet.
Paul Donovan, in his note from UBS, noted that the markets were not that impressed by the state of play. The markets, he said, were pricing in “the debate about when the next restructuring will take place.”
As Eurozone finance ministers sign off on another badly needed bailout for Greece, the second chapter of this never ending story comes to a close. Mind you, that isn't to say the country won't need a third dollop of cash in the future. Most economists I have asked reckon it will.
Greece's crisis has prompted almost as many dubious puns as it has snorts of derision.
So for those of you fed up with being told "Greece is the word" (get it?) or "it’s all Greek to me" (ha ha) fret not!
In fact, there's a whole dictionary of dodgy terms invented for politicians and pundits to couch themselves.
(CNN) - The fact that Greece is not officially regarded as defaulting is ridiculous – and how anyone can say the 70% net debt “haircut” for the private sector is truly voluntary simply beggars belief.
But now that Standard and Poor’s has downgraded Greece’s credit to “selective default,” that part of the fig leaf has been stripped away – and the International Swaps and Derivatives Association (ISDA) must declare that a “credit event” has now happened in Greece if the organization is to maintain any shred of credibility.
A “credit event” will enable anybody who’s holding Greek debt to enact a credit default swap (CDS), a form of insurance that investors use to protect against default. For these insurances to pay out, there has to be a “credit event.”
When the Greek parliament decided unilaterally to change the terms of its bond agreements with investors, that was the “credit event,” and now the ISDA must act. FULL POST
(CNN) - Greece may be known for its tragedies and Iceland famous for its sagas but recent history tells us these stories may turn out to have very different endings–from an economic point of view at least.
In October 2008, Iceland became one of the earliest victims of a credit crunch whose ugly effects many Europeans are still living with today.
The North Atlantic island was the first entire country to almost go under, sunk by the weight of a banking sector whose debts amounted to more than six times Iceland's entire economy.
However, three years on, Iceland is poised to re-emerge from economic purgatory.
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