Greece

I doubt that Angela Merkel is looking forward to the G8 summit very much. It will mostly consist of the other world leaders telling her to give ground on austerity. But I suspect that Merkel won’t budge much, if at all. She clearly believes that the Greeks can be whipped into line by telling them that the election is really a referendum on euro membership. Hence both her suggestion of a simultaneous referendum on election-day and her backing for the European Central Bank cutting off support to Greek banks which shows that while there’s no formal mechanism for ejecting a country from the single currency there are ways of doing

David Cameron’s speech today is a sign of his frustration with the eurozone. Numbers 10 and 11 are increasingly irritated by how eurozone leaders are refusing to accept the logic of their project. What Downing Street is keen to avoid is another wasted year as Angela Merkel gears up for her reelection campaign. So, intriguingly, we see Britain throwing her weight behind Hollande’s support for project bonds. Cameron also uses the speech to again back eurobonds, which Merkel is firmly opposed to as she knows that this would mean Germany effectively standing behind everyone else’s debt. I can’t see a resolution to this crisis coming anytime soon, though. The economics

Today’s PMQs will be remembered for one thing, Cameron saying that the eurozone had to ‘make up or it is looking at a potential break-up’. This is a distinct hardening of the government’s line on the single currency. Cameron’s comment was particularly striking coming just days after George Osborne said that ‘open speculation’ about whether or not Greece would leave the euro was ‘doing real damage across the whole European economy’. However those close to Cameron are not resiling from the remark. Instead, I understand that we can expect more from the Prime Minister on this subject when he makes a speech on the economy tomorrow. The break-up of the

Now that negotiations have broken down in Athens, and there will be another election, we face the prospect of an almighty staring contest. On one side, the Eurocracy, who will be urging Greek political parties — and particularly the left-wing coalition Syriza, which is ahead in the polls at the moment — to soften their anti-austerity stance. On the other, the Greek politicians, who might be hoping that the eurozone relents to some extent, and allows the cuts to be decelerated. The question is: who will blink first? As it stands, it’s difficult to come up with an answer. The leader of Syriza, Alexis Tsipras, is unlikely to blink over

A second Greek election is looking more and more likely, with party leaders unable to form a coalition. I reported on Tuesday that Antonis Samaras — leader of the largest party, New Democracy — had admitted that he couldn’t put together a government and had passed on the mandate to Alexis Tsipras, leader of Syriza. Well, Tsipras also failed to build a coalition, as he couldn’t convince ND and centre-left Pasok to turn against their austerity plan, and so the baton has been passed to Pasok leader Evangelos Venizelos. His hope was to convince Democratic Left — which holds 19 parliamentary seats — to join his and Samaras’s parties in

‘The eurozone’s weakest link just got weaker.’ So says Tristan Cooper, sovereign debt analyst at Fidelity Worldwide Investment, on the results of Sunday’s Greek elections. The four parties who said they would continue the country’s austerity programme won just 36.4 per cent of the vote between them. The two of those that won parliamentary seats — centre-right New Democracy and centre-left Pasok — fell just short of a combined majority (they now hold 149 of the 300 seats). And now ND leader Antonis Samaras has admitted defeat in his efforts to form a coalition. The impasse has come about because of the anti-austerity parties’ refusal to join New Democracy in

Britain out of Brussels’ clutches by 2020? It can happen, says David Owen, in a piece for the magazine this week. It’s based on a speech to Peterhouse College, Cambridge. Here’s the full version: In all the controversy about the eurozone and Greece it is easy to ignore one simple fact: maintaining a core eurozone is creating an unstoppable momentum towards a United States of Europe. On 7 February 2012 the German Chancellor Angela Merkel indicated very clearly her direction of travel. The eurozone crisis for her is to be the springboard to another Treaty to replace the Lisbon Treaty. She said ‘Step-by-step, European politics is merging with domestic politics.’