Robert Kahn

Macro and Markets

Robert Kahn analyzes economic policies for an integrated world.

Taking Stock of the Greece Crisis

by Robert Kahn Thursday, July 30, 2015

Yesterday, John Taylor and I testified on the Greece crisis before the Senate Foreign Relations Subcommittee on Europe and Regional Security Cooperation.  A summary of my testimony is here (including a link to my written statement), and the full video of our discussion is here. I continue to see Grexit as the most likely outcome, as we are at the very early stage of a complex adjustment effort that will face serious economic and political headwinds in Greece, and will be extraordinarily difficult to sustain. But whether Greece is ultimately better off in or out of the euro, a competitive and growing Greece is an objective the United States shares with our European partners.

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Ukraine Needs a Moratorium

by Robert Kahn Thursday, July 23, 2015

After months of standoff, the Ukraine government appears to be making halting progress towards an agreement restructuring its external private debt. On hopes of a deal, and ahead of an IMF Board meeting next week to review its program, the government reportedly has decided that it will make a $120 million payment to creditors due tomorrow. It is possible that decision to repay will be seen as a signal of good faith and create momentum towards an agreement, but I fear it’s more likely we have reached a point where continuing to pay has become counterproductive to a deal. Absent more material signs of progress in coming weeks, there is a strong case—on economic, political and strategic grounds—that a decision to halt payments and declare a moratorium gives Ukraine the best chance of achieving an agreement that creates the conditions for sustainable debt and a growing economy in the medium term.

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Greece: The Hardest Month

by Robert Kahn Monday, July 20, 2015
Greek Banks Reopen People wait to enter a National Bank branch in Athens on July 20, 2015. (Ronen Zvulun/Reuters)

Greek banks reopened today, but there isn’t much you can do at them. Capital controls and withdrawal limits remain in effect, money transfers are barred (except for tax, social security or a few other allowed domestic transactions) and new accounts or loans effectively ruled out. Greeks now will be able to deposit checks, access safety deposit boxes, and withdraw money without an ATM card. All good things, though I suspect that any political boost from the visuals relating to reopening will proved short-lived.

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Greece’s Program: First Hurdle Cleared

by Robert Kahn Thursday, July 16, 2015
Prime Minister Alexis Tsipras battled to win lawmakers' approval on July 16 for a bailout deal to keep Greece in the euro. (Alkis Konstantinidis/Reuters) Prime Minister Alexis Tsipras battled to win lawmakers' approval on July 16 for a bailout deal to keep Greece in the euro. (Alkis Konstantinidis/Reuters)

The Greek parliament last night passed the first package of measures required by the government’s agreement with European governments reached over the weekend, winning 229 of 300 votes in the parliament. There were a large number of Syriza defections (39) that would appear at minimum to require a cabinet reshuffling. Some local analysts predict the government could fall, though most expect that if that happened Prime Minister Tsipras would reemerge as prime minister in a new coalition government.

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Greece and Europe: A Deal to Talk About a Deal

by Robert Kahn Sunday, July 12, 2015
Greek Prime Minister Alexis Tsipras speaks with German Chancellor Angela Merkel and French President Francois Hollande at a eurozone leaders' summit in Brussels on July 12, 2015. Greek Prime Minister Alexis Tsipras speaks with German Chancellor Angela Merkel and French President Francois Hollande at a eurozone leaders' summit in Brussels on July 12, 2015.

European leaders, meeting tonight in Brussels, appear to have given Greece something close to a take-it-or-leave-it offer.  If the Greek government can pass far-reaching reforms by Wednesday, creditors will provide bridge financing to meet near-term debt payments and cash to reopen the banks.  These steps also would allow a rebuilding of trust and allow negotiations on a third bailout that could total €86 billion to proceed.

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Greece: Europe Divides, Deal Elusive, Grexit Looms

by Robert Kahn Sunday, July 12, 2015
Tsipras and Hollande Greek Prime Minister Alexis Tsipras listens to French President Francois Hollande during a eurozone summit in Brussels on July 12, 2015. (Francois Lenoir/Reuters)

European finance ministers are meeting this morning amidst deep divides over whether, and on what terms, to provide a lifeline to Greece. Finance Ministers will not agree to a deal, with Germany (and other skeptical governments) resisting pressure from France and Italy for concessions to Greece. Leaders will have to decide.

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Greece and the Eurozone: Time to Decide

by Robert Kahn Wednesday, July 8, 2015
European Council President Donald Tusk told the European Parliament there were only "four days left" to reach an agreement on Greece. (John Kolesidis/Reuters) European Council President Donald Tusk told the European Parliament there were only "four days left" to reach an agreement on Greece. (John Kolesidis/Reuters)

Another cliff in the never-ending Greek drama, as European leaders set a Sunday deadline for a deal. It’s easy to be cynical, but Europe could look very different next week. I now think that “Grexit” is very likely, and it could happen soon.

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Currencies Are Easy, Policies Are Hard

by Robert Kahn Sunday, July 5, 2015
Drachma or Euro? Will Greece give up the euro for the drachma? (Murad Sezer/Reuters)

Now that Greek voters have voted “no” in the referendum, the government is engaged in a last-ditch effort to reach agreement with its creditors on policies and financing; if an agreement is not reached soon, a rapid move to a new currency appears likely.

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