Early Headlines: Greece Austerity Unsustainable, US Women World Cup Final, China PMI Steady, China Stock Crash Continues and More

Early Bird Headlines 01 July 2015

Econintersect: Here are some of the headlines we found to help you start your day. For more headlines see our afternoon feature for GEI members, What We Read Today, which has many more headlines and a number of article discussions to keep you abreast of what we have found interesting.

U.S.

• U.S.A. Beats Germany 2-0 To Advance To Women’s World Cup Final (Huffington Post) No. 2-ranked U.S. dominated most of the match, but a scary moment came in the 59th minute when defender Julie Johnston was handed a yellow card and No. 1-ranked Germany was given a penalty kick at point blank range in the middle of the penalty box. However, German striker Celia Sasic, after faking U.S. goalie Hope Solo completely out of the net, sent the ball wide, leaving the score remaining at 0-0. The U.S. will play the winner of England vs. Japan in the final, Sunday in Vancouver. The U.S. and Japan have an intense rivalry, with Japan beating the Americans for the World Cup in 2011 and the U.S. winning Olympic gold by defeating Japan in 2012. The U.S. women last won the World Cup 16 years ago.
  

Greece

• Tsipras Under Pressure to Cede After Greece Misses IMF Payment (Bloomberg) European leaders are waiting for signs that Greek Prime Minister Alexis Tsipras is ready to compromise as his country buckles under capital controls and fails to make its International Monetary Fund payment. Econintersect: It was all about forcing the leftist to concede from the start – there never was an intention to negotiate.
  
• IMF: austerity measures would still leave Greece with unsustainable debt (The Guardian) Secret documents show creditors’ baseline estimate puts debt at 118% of GDP in 2030, even if it signs up to all tax and spending reforms demanded by troika. Econintersect: And that assumes that IMF (International Monetary Fund) projections are not overly optimistic, as they have been in the past.
• Greece heads for IMF default, despite last-minute overtures to creditors (Reuters) With Greece is hours away from defaulting on a 1.6 billion euro loan to the International Monetary Fund, German Chancellor Angela Merkel ruled out further negotiations until after Sunday’s referendum that Prime Minister Alexis Tsipras has called to vote on further bailout terms offered.
  
• The Restoration of Dignity (Jacobin) Hat tip to Roger Erickson. It appears the past few months have not been about negotiation, according to this article. The Troika Institutions had an end game: Either force the Syriza government to go back on its populist liberal campaign pledges and accept continued debilitating austerity or force them from office. (Econintersect: One has to wonder who really has been the most expert at game theory.) Earlier in June the preparations were made for the second result:

The leaders of the right-wing New Democracy and the center-left Potami parties were summoned in Brussels for talks. It was now time for the European Commission and its president, Jean-Claude Junker, to do what it knows best – manage the blame game.

• Europe Wants to Punish Greece With Exit (Bloomberg) Clive Crook unloads. Here is about 1/3 of it:

In my more than 30 years writing about politics and economics, I have never before witnessed such an episode of sustained, self-righteous, ruinous and dissembling incompetence — and I’m not talking about Alexis Tsipras and Syriza. As the damage mounts, the effort to rewrite the history of the European Union’s abject failure over Greece is already underway. Pending a fuller postmortem, a little clarity on the immediate issues is in order.

On Monday, European Commission President Jean-Claude Juncker said at a news conference that he’d been betrayed by the Greek government.

The creditor institutions, he said, had shown flexibility and sought compromise. Their most recent offer involved no wage cuts, he emphasized, and no pension cuts; it was a package that created “more social fairness.” Tsipras had misled Greeks about what the creditors were asking. The talks were getting somewhere. Agreement on this package could have been reached “easily” if Tsipras hadn’t collapsed the process early Saturday by calling a referendum.

What an outrageous passel of distortion. Since these talks began five months ago, both sides have budged, but Tsipras has given vastly more ground than the creditors. In particular, he was ready to accede to more fiscal austerity — a huge climbdown on his part. True, the last offer requires a slightly milder profile of primary budget surpluses than the creditors initially demanded; nonetheless, it still calls for severely (and irrationally) tight fiscal policy.

In contrast, the creditors have refused to climb down on the question of including debt relief in the current talks, absurdly insisting that this is an issue for later. On Tuesday, Tsipras made his most desperate attempt yet to bring the issue forward.

Far from expressing any desire to compromise, dominant voices among the creditors — notably German Finance Minister Wolfgang Schaeuble, who often seemed to be calling the shots — have maintained throughout that there is nothing to discuss. The program already in place had to be completed, and that was that.

Yes, the program had failed. No, it wouldn’t achieve debt sustainability. Absolutely, it was pointlessly grinding down Greek living standards even further.

China

• China June factory, services surveys fuel hopes economy leveling out, no quick rebound seen (Reuters) The official PMI (Purchasing Mangers’ Index) results for both manufacturing and services are offering some hope that the Chinese economy is stabilizing. While the overall manufacturing index remained unchanged in June at 50.2, just above the mark of 50 below which indicates contraction, there were still some troubling components as new orders, new export orders and employment continued to contract and at a faster rate than in May. The services PMI was the star, registering a strong 53.8 reading, up from 53.2 in May.
  
• There Are Now More Stock Traders in China Than Communist Party Members (Bloomberg) There are now more than 90 million individual investors in China, outnumbering the 87.8 million Communist Party members for the first time. And are they ever getting an investing lesson. See next article.
• Asian shares rise cautiously after Greek default (CNBC) Chinese stocks could not match other Asian markets as the Shanghai Composite slid another 5% in intraday trading Wednesday. This widely followed index is now down more than 22% from an early June high of 5174. Other Chinese indexes are down more. See next article.
• Chinese equity markets Chinext Composite (IDEAeconomics, Twitter) This index for Chinese technology stocks in down by a third since 01 June.
  

BUSTWATCH Chinese equity markets Chinext Composite pic.twitter.com/6epgd2HVU0

— IDEAeconomics (@IDEAeconomics) June 30, 2015

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