OECD - In its latest interim economic assessment the thinktank warns that against a backdrop of better growth prospects for big economies, including in the eurozone, there is a growing risk of financial instability.  Its prime concern is that low borrowing costs and inflation mean activity is driven by easy money rather than fundamentals. The OECD highlights an over-reliance on central bank policy and warns that more needs to be done by governments in terms of tax and spending policy as well as structural changes.   Lower oil prices and widespread monetary easing have brought the world economy to a turning point, with the potential for the acceleration of growth that has been needed in many countries,” said OECD chief economist Catherine Mann.    “There is no room for complacency, however, as excessive reliance on monetary policy alone is building up financial risks, while not yet reviving business investment. A more balanced policy approach is needed, making full use of fiscal and structural reforms, as well as monetary policy, to ensure sustainable growth and public finances over the longer term.”   The OECD used its latest in-depth report into the UK to warn that more needs to be done to fix the country’s poor record on productivity, which it sees as key to raising living standards. The thinktank also had some encouraging words for George Osborne as he heads towards the election – it praised his economic policies and renewed backing for the chancellor’s austerity drive.   The group’s latest outlook highlighted a boost to the US economy from strong domestic demand, which, combined with a strengthening dollar, was adding to demand in the rest of the world. The euro area should benefit from low oil prices, monetary stimulus and euro depreciation, which “combine to offer the chance to escape from stagnation”, the OECD added.

Summarising the outlook for other big economies, the thinktank says:  In Japan, monetary and fiscal stimulus provide the impetus for faster near-term growth, but longer-term challenges remain. A gradual slowdown in China, towards the new official growth target, is expected to continue. India is expected to be the fastest-growing major economy over the coming two years, while the outlook is likely to worsen for many commodity exporting nations, with Brazil falling into recession.”

Oh I do enjoy watching a contest between two sides I dislike equally, vying to see who can pee the furthest! (BTW, Telegraph, where do you keep finding these marvelous pictures of tattered EU flags?)  " .... the head of the eurogroup of finance ministers warned Greece may need to impose "Cyprus style" capital controls." Ah yes indeed. Consistently sound advice from a Great Fraud of Europe bureaucrat.  Capital has been flooding out of Greece for months. They have no money and are reduced to raiding pension funds (the equivalent of stealing grannie's coin purse). In any case, Greece's recent answers to most GFoE 'warnings' have been near-unprintable so what's the likely response to this one going to be?   As summer nears I believe I'll break out a camp chair, pop some popcorn and prepare to watch this show with interest... Greece should NOT have been able to join the EU under the rules, But the chaps who fiddled the way for Greece are now the chaps who are profiting from the interest payments Germany has earned 2 billion euros so far.  The banks have already been paid out by the tax payer and got away scot free. The greeks need to perform as they pledged, stuff the repayments and default. The Gov't of Greece is there to protect the Greek people, not run them into the ground. Watch out it is coming to the rest of us soon, who ever heard of a "bail in" to help a failing business? i.e bank. that is the new rule in the EU, May soon appear in the UK....

So, not a single foreign investor at this morning's Greek T-bill auction - same as last week. Only Greek banks were arm-twisted into rolling them over again.  Hand to mouth stuff - settlement date for today's bids is Friday, when the prior T-bills mature. No new money was raised, simply refinancing.  This gives the ECB a massive problem - as not even a shred of 'market access' to support a decision to extend ELA. It would be demonstrably financing the Greek State if it increases ELA tomorrow (other than offsetting capital outflows, as before)..

The tensions reflect a deterioration in trust between Greece and its international creditors in recent weeks.  Escalating fears that the country may not be able to secure the funds it needs to stay solvent until June, the head of the eurogroup of finance ministers warned Greece may need to impose "Cyprus style" capital controls.   Jeroen Dijsselbloem, who is also the Dutch finance minister, equated the plight of the two debt-stricken nations saying it was important to "think about Cyprus" as an example Greece could follow. "The amount of cash ... is declining by the day."   Mr Dijsselbloem's comments could hint at the reasons behind Athens' reluctance to conduct negotiations with the bloc's finance ministers, preferring instead to carry out talks among the EU's leaders at a European Council meeting in Brussels...The Greek government has demanded bail-out talks be carried out at an EU summit later this week, frustrating its creditors in already strained bail-out negotiations.   According to reports, Athens refused to update European finance ministers about its plans to implement vital reforms at a scheduled teleconference yesterday.  One European official was quoted as saying the country's brinkmanship was "something of the last straw". The International Monetary Fund, one of Greece's main three creditors, was reported to have called Greece "the most unhelpful client" the Fund has dealt with in their 70-year history during the ill-tempered teleconference.  Athens is due to make a €350m repayment to the Fund THIS MONTH.

A senior Bank of England official has said that Greece will never be able to get rid of its enormous debt mountain, since the "political pain" that its leaders would suffer would make it impossible.

Alex Brazier said that Greece could, in theory, run a surplus large enough to shrink its debt mountain, which currently runs to 176pc of GDP, after bail-outs worth €245bn.   However, he said no elected government would be able to do so, suggesting that Greece will be left with an enormous debt overhang for some time.  Figures from the Bank of Greece released on Monday showed the country had fallen back into deficit over the first two months of the year. Greece was in the red by €684m January and February, compared to a €139m surplus it registered over the same period last year.   Mr Brazier is a senior figure at the Bank, as its executive director for financial stability strategy and risk and a member of the Financial Policy Committee, which tries to ensure financial stability in the UK.    I would like all of those who make the claims about "whining" Greeks and all these very 'humanitarian' comments to imagine what it is like to have 40-50% of their incomes lost due to adjustment policies. Fat chance these 'humanitarians' will and - what is worse - many of the people here making these comments are most likely Greeks themselves.  Apart from that, it is true that Greece has been tainted by corruption, malfunctioning and ailing institutions, and a mentality of extremely low trust - all these making a vicious circle.  But ask yourselves this (at least those of you who do bother to read and whose open mind is not narrower in reality than the margins of a school notebook):  This has been going on for decades if not centuries, any wonder why it came to a boil now, the debt especially? It is because of the whole banking crisis and more specifically banks lending Greece in the good-ol' years and now basically getting away with it in all of EU... "One can surely agree with the logical and legal demand for Greece to pay its debt, however, one thing I can't understand is: What continual logical sequence is connecting faulty banking system, obviously wrong political decisions leading to fiscal imbalance and bankruptcy, on the one side, with massive public cuts affecting only simple people, on the other side, in other words: "Why punish simple people for bankers and politicians wrongdoings?!"    Why are people making wrong decisions put automatically out of the equation and not took under consideration?"

Relations between Greece and its creditors reached breaking point on Thursday as the country's finance minister accused the European Central Bank of "asphyxiating" the cash-strapped economy.

In a series of traded insults, Yanis Varoufakis said the ECB, which has tightened the noose on the Leftist government, was "pursuing a policy that can be considered asphyxiating toward our government."   His comments came before Germany's Bundesbank chief Jens Weidmann said Athens had "squandered the trust" of its European partners.  As one of Greece's main three international creditors, the ECB has rebuffed Athens' requests to raise short-term debt to alleviate an impending funding crisis.   Greece, which has yet to be granted access to €7.2bn in bail-out funds, is scrambling to pay €1.2bn in loans to the IMF before the end of the month.

Athens has also been seeking a €2bn increase in emergency funding for its banks as deposit flight has accelerated over the past month. According to reports, the central bank decided to raise the ceiling by just €600m on Thursday. Greek lenders have been increasingly reliant on the expensive emergency funds from Frankfurt after the ECB stopped its ordinary lending to the country. The country's Eurosystem funding reached a 13-month high of €104bn, in February according to the Bank of Greece. But Mr Weidmann, who sits on the ECB's governing council, said the assistance had to be "temporary" and could only continue as long as Greek lenders remained solvent. 

The Greek Prime Minister Alexis Tsipras is in Brussels today to meet the European Commission’s President Jean-Claude Juncker.  The pair will attempt to make some progress on a way forward for Greece, after eurozone finance ministers rejected Athens’ reform proposals on Monday. Juncker said he was ready to make “proposals” to overcome the differences between Greece and its eurozone partners.  I’m not satisfied with the developments in recent weeks. I don’t think we have made sufficient progress.  I’m totally excluding a failure. I don’t want a failure. I would like Europeans to go together. This is not a time for division. This is a time for coming together.

Tsipras said he was optimistic the political will existed to find a solution soon. 

About time the ordinary elector of the EU rose up and threw these people out.

Frankfurt, the euro area’s financial capital and home of the common currency, is bracing for demonstrations and sit-ins on Wednesday at locations throughout the city by anti-austerity groups and organizations sympathizing with the plight of Greece.   At the ECB’s €1.3bn premises in the east end, police have erected barbed wire and barricades to keep the protesters at least 10 meters away.   “We want a march open to anyone, peaceful and not harming anyone,” Ulrich Wilken, a lawmaker for the Left Party in the Hesse state parliament, said on Tuesday after meeting with police to outline the marchers’ objectives. “We want an atmosphere of peaceful protest, not the kind of situation the police prepares for with its tanks.”   Nine days after the ECB started buying sovereign debt in a €1.1 trillion plan to revive inflation and rescue the economy, protesters are laying the blame for recession and unemployment in the 19-nation euro area at the doors of ECB President Mario Draghi and German Chancellor Angela Merkel.   A new government in Greece, led by the leftist Syriza party, is preparing emergency measures to boost liquidity as the cash-starved country braces for more than €2bn in debt payments on Friday. The country is unable to access bailout funding as it haggles with euro-area governments over the terms of its aid program. Its lenders have been cut off from regular ECB finance lines and pushed onto emergency credit from the Greek central bank. ...  hope they burn it down.  This sort of waste of taxpayers money by an unelected and unaccountable organization, the EU, is exactly what is wrong with the EU. The Billions they have stolen from the poor taxpayers across the continent forcing them into abject misery whilst lavishing it on themselves in grandiose edifices such as this and their gold plated pay and pensions. It is just like the old soviet union.  About time the ordinary elector of the EU rose up and threw these people out.

Greece back in the fold

After days of fractious exchanges with its international creditors, Greek Prime Minister Alexis Tsipras has urged Europe to show solidarity with his country as it awaits the approval of a vital bail-out extension.   Speaking after a meeting with European officials in Brussels, Mr Tsipras said his government was doing all it could to fulfill the conditions of its bail-out and called on Greece's partners to do the same.  Striking a more optimistic tone than in recent days, Mr Tsipras said: "we will find a solution because I strongly believe that this is our common interest.

"I believe that there is no Greek problem, there is a European problem."

His comments came after Germany's Wolfgang Schaeuble warned that Athens' brinkmanship over implementing economic reforms could result in a disorderly Greek exit from the eurozone - dubbed a "Grexident".   "To the extent that Greece is solely responsible and decides what is to happen, and we don't know exactly what Greek leaders are doing, we can't exclude it," said Mr Schaeuble.  The claims are unlikely to soothe tensions between Greece and the eurozone's largest creditor country.  Mr Schaeuble was the subject of an official complaint from Athens who accused the finance minister of making derogatory comments about his Greek counterpart Yanis Varoufakis.

But there were tentative signs of a thawing between the two sides, with reports suggesting Berlin was willing to stand down over its opposition to Greek plans to issue short-term debt to alleviate its funding crisis.  The European Cental Bank has so far rebuffed Athens' requests to raise the ceiling on the issuance of Treasury bonds.  Instead the ECB has been drip feeding its emergency assistance (ELA) to Greece's banks which have suffered from rising desposit flight since Syriza came into power. There we are then...Greece back in the fold...after all that hype...