One very last chance?

Greece was told tonight three things: one, they have to come up with a detailed and implementable financial reform programme; two, the European Commission has already prepared a contingency plan in case Greece leaves the euro zone; and third, their new policy reform proposal has to be ready for a careful analysis by the Euro group by Thursday, in view of the EU extraordinary summit called for Sunday, 12 July.

All in all, this sounds like the final leg of a very confusing process. A deadline.

The major risk, besides the one related to missing the deadline, is related to a possible split within the EU. Some countries might go one way and others adopt a different direction. That has to be avoided at any cost.

As we have to prevent any decision that takes flexibility beyond the reasonable enactment of the rules. The rules are essential for the survival of the union.

The risks of a political earthquake in Shanghai

The Shanghai Stock Exchange lost more than 25% of its value in the last three weeks. This is a major shock. If this trend continues the situation will develop into mass panic – many very small investors had borrowed money in the recent past to invest in the Shanghai bourse. It is therefore a major political issue for the authorities in Beijing. They have shown signs of serious concern. Action will be taken in the next few days, for sure. We should observe with great attention the measures they will put in place to respond to the matter. 

On Greece´s next steps

We should congratulate Alexis Tsipras this evening. The Greek voters have shown they unmistakably support him and his approach to country´s debt issue.

Now Tsipras has to come up with a clear negotiating position. It has to be on the Euro group tables by tomorrow. There is urgency. And it is also very urgent to show that there is a way forward.

The proposal has to come from the Greek side. And be ready for a decision to be taken on Tuesday evening, when the Euro group leaders meet in Brussels.

These are indeed extraordinary times. They call for very clear commitments and well defined boundaries. Indecision and vagueness are key risks to avoid. As one has to avoid to be trapped by personal likes and dislikes. We might not like the other side, but we have to sit with him and talk in a very frank and constructive way. 

Celebrating the US big day

US Independence Day: time to salute all my American friends and to reiterate that the alliance between Europe and North America is critically important for both sides. And one way of showing it passes through the strengthening of the European side. A stronger Europe makes the alliance more solid. We tend to forget this dimension of the cooperation. Therefore, let me take advantage of the day to evoke it.

Young radicals for political reasons

Malek Boutih is a French Member of the National Assembly. His family roots can be found in North Africa and in the Islam. 

At the request of Manuel Valls, the Prime Minister of France, Boutih as looked at the radicalisation of the French youth. After four months of interviews and consultations, he has just issued his report. He called it “Géneration Radicale” and indeed the key point he makes is that many among the French youth are indeed attracted by a radical approach to politics and social engagement. Boutih´s main conclusion is that the extremism the young people espouse is basically a political response – and not a religious option. The extremists see no room for them in the French society, have no hope of a better life, feel they do not belong –notwithstanding they are second or third generation French nationals, as children and grandchildren of North African former immigrants – and then they look elsewhere. They end up by seeing violence as a means to be heard and a way of gaining the protagonism that an European society will never afford them.

The report is worth noting. And the key reading is that Western European societies have to be prepared to respond, in a comprehensive, multifaceted manner to the radical challenge. This is not a temporary problem. It is something that has now deep roots in our societies. It requires top attention.

Greece: Fast running towards the abyss

The Greek crisis is now getting to the breaking point. Businesses are just closing their doors as they have little or no access to financial resources. Payments to external suppliers are becoming almost impossible. Domestic payments are just paper payments, no real cash is moving around.

Four days without an operational banking system has a major impact on the economy in a developed country.

And I do not see the banks being able to re-open on Tuesday, as the government wants us to believe. People have lost most of their confidence in the financial institutions and are desperate to take out of the system whatever little money they still have in their accounts.

We are running fast against the wall.

And we do not seem to be aware of it.

We just take the days as normal days in a country that can no longer afford to run as usual. The government needs to take exceptional measures. And I do not see the current leadership being able to do it. For whatever reason, they seem to believe that everything will be much easier after the referendum. Or, the referendum is three days away in a country that needs decisions now. 

Puerto Rico´s money problems

Today we should look elsewhere. To the US, for instance as we get the news that Puerto Rico is also broke. The public debt is around USD 72 billion and the territory’s government is in no position to honour it. Default is around the corner. But it looks manageable as debt represents only 70% of nominal GDP. In any case, it will end up by causing some losses for those who have placed money in public bonds. That´s what they mean by “manageable”: the State borrows and with time the private citizens get a serious haircut. 

Clarifying the relationship with Greece´s political establishment

Political uncertainty is not a good option. The role of leadership is to make it as short as possible. Leaders clarify and define the rules. We expect them to sort things out without too much delay. We also expect them to be able to properly and openly communicate about their decisions.

That´s what is happening in the case of Greece, I want to believe.

We are now in the process of clarifying the relationship with the Greek government. We should also be able to clear up the rapport with the rest of the country´s political class. The connection with them has been too ambiguous. They have to tell us how far they are prepared to go. We should then state if we can go along or not. They have the right to decide about their own future. And we have the same right to choose if we are part of that journey or not.

Both sides have to be wise, in addition to being clear. But above all, both sides have to be sincere and be perceived as such. 

On the road

I have been on the road during the last few days. The blog will be back tomorrow. Thank you for your kind attention to my writing. It is important to be read. 

Spying on friends

Friends do not spy on friends. No government, including the US, is authorised to tap the communications of its allied nations’ leaders. This is a very basic principle of healthy alliances.

Keeping this in mind, I fully understand the anger President François Hollande has expressed today when he learned that he, and those before him at the Elysée Palace, have been spied upon by the intelligence services of the US.

Let´s also hope that France is not doing it elsewhere as well.