Weekend Roundup: China’s Equity Bubble and Greece’s Debt Hole Rattle the World


Nathan Gardels is the editor-in-chief of Noema Magazine.

The world was rattled this week by the busted stock market bubble in China and by the “no” vote in Greece last Sunday against austerity policies aimed at reducing the country’s unpayable debt.

Yet, by week’s end, Prime Minister Alexis Tsipras appeared to cave in and say “yes” to the very austerity measures voters had rejected in return for a fresh $59 billion bailout package. After $3.2 trillion of value was wiped out by midweek, the uncharacteristically uncertain hand of the Chinese authorities intervened to stop the crash in a stock market they had cheered to ever greater heights over previous months. Meanwhile, the leaders of the BRICS countries met in Russia to bolster plans for their New Development Bank — which rivals the World Bank — and declared they would coordinate policies to keep their economies stable amid all the turmoil.

Mohamed El-Erian, one of the most influential voices in the global bond market, writes that the link between the Chinese and Greek crises is the stimulative policies of central banks around the world that have led to a debt buildup and created a gap between the inflated value of financial assets and the real economy.

From Chengdu, WorldPost China Correspondent Matt Sheehan surveys the attitude of people on the street about this week’s stock market crash. Nobel laureate Muhammad Yunus writes how the new BRICS bank can avoid making the same mistakes as the World Bank.

In an interview, London School of Economics professor Paul De Grauwe explains what is behind Tsipras’ post-referendum U-turn and what it means for Greece going forward. Writing from Paris, Jacques Delors, the former president of the European Commission and a strong proponent of federalism, tells the Greeks that their democratic legitimacy does not “take precedence over the democratic legitimacy” of other European nations. French philosopher Bernard-Henri Lévy scores the Greek referendum as more an action of mobocracy than democracy.

Writing from Athens, Andreas Papandreou says Greece needs European rules to force reforms that its clientelistic politics have continually blocked. Also writing from Athens, Michael Skafidas recalls the hopefulness and celebrations when Greece first entered the European Economic Community back in 1981, and reports that some pensioners now find the situation “darker than during the dictatorship.” Our World editors look at what a Greek pensioner’s 120 euros buys and what it is like for ordinary Greeks to live with bank closures and ATM controls.

Nicolas Berggruen and I argue that the Greek crisis has revealed a “double truth” that an “ever closer union” in Europe can only be reached if all agree to the rules of supranational sovereignty, but for Greece to follow those rules will only entail further economic depression. We thus call for a “two speed” Europe in which Greece leaves the eurozone but remains in the European Union.

IMF economist Olivier Blanchard defends the Fund against criticism of its Greek policies. Writing from Dublin, Karl Whelan notes that pushing Greece out of the eurozone will minimize, not maximize, the chance that its creditors will be paid back. Antonio Roldán Monés fears that the ripples of a Grexit will hit other economies in the periphery of Europe that are vulnerable. HuffPost Spain editor Montserrat Domínguez wonders whether Europe’s leaders are prepared for “the light-speed contagion” of Syriza’s rebelliousness in Spain, Portugal and Italy. Angela Mauro reports from Italy on how the “new left” around Europe rejoiced at Syriza’s “no” victory.

Writing from Rome, HuffPost Italy editor Gianni Del Vecchio says Europe’s fate is now in the hands of Berlin and Paris, a sentiment echoed by HuffPost Greece editor Pavlos Tsimas. Development economist Jeffrey Sachs warns that “a corpse can’t carry out reform” and calls for a package of simultaneous debt relief and reform commitments. Writing from Paris, the founding president of the European Bank for Reconstruction and Development, Jacques Attali, charts out a four-point plan to keep Greece in the eurozone and reminds Europe’s leaders that there is no ultimate resolution until the single currency union is completed with a banking and fiscal union. Daniel Marans reports on an innovative proposal from former IMF chief Dominique Strauss-Kahn for a two-year debt payment moratorium that would give Greece some breathing space for reforms. He also looks at how German comedians are making fun of the absurdity of austerity policies in Greece.

Writing from Copenhagen, Bruno Kaufmann examines what has happened to Denmark’s celebrated “beer drinking democracy” as recent crises over immigrants polarize the famously happy country.

In part three of an interview, WikiLeaks founder Julian Assange ponders whether there are any secrets he would not release, if his work has made any difference and whether he will ever leave the Ecuadorian embassy in London where he is hold up.

Barbara Finamore of the Natural Resources Defense Council says China is keeping to the climate pledge it made to President Obama. Roque Planas explains “how race works” in the ongoing immigration conflict between Dominicans and Haitians.

Marking the anniversary of the Srebrenica massacre in Bosnia-Herzegovina, Jordan’s Queen Noor says that genocide can only be healed by facing the truth and finding justice for the victims. Former Bosnian Foreign Minister Muhamed Sacirbey and Special Representative to the United States and the United Nations for the National Coalition of Syrian Revolution and Opposition Forces Najib Ghadbian argue that Syria is Srebrenica all over again. Chandran Nair argues that Western sanctions against Iran are not only arrogant, but also immoral and futile. Nuclear arms expert Joe Cirincione provides a primer on what to expect in a deal if the negotiations with Iran successfully conclude in the coming days. Writing from London, Mayor Boris Johnson lauds his city’s resilience as it remembers the terrorist attacks there on 7/7 a decade ago.

In this week’s “Forgotten Fact,” World editor Charlotte Alfred reports on how the conflict in South Sudan is killing women far from the battlefield. She also posts a photo essay of a maternity ward there.

WorldPost Middle East Correspondent Sophia Jones reports on Egypt’s desire to jail journalists for not falling in line — and how it’s being trained by a U.S. nonprofit.

To mark the one year anniversary of the Gaza war, we look at what life is like there now — in photos.

Our intrepid Amazon bio-explorer Aaron Pomerantz films a monkey-eating eagle in Peru. Fusion this week reports that Mexico “is becoming the drone capital of Latin America.” Finally, in our Singularity series, we look at the evolving image of “Terminator” killer robots.


EDITORS: Nathan Gardels, Senior Advisor to the Berggruen Institute on Governance and the long-time editor of NPQ and the Global Viewpoint Network of the Los Angeles Times Syndicate/Tribune Media, is the Editor-in-Chief of The WorldPost. Farah Mohamed is the Managing Editor of The WorldPost. Kathleen Miles is the Senior Editor of the WorldPost. Alex Gardels and Peter Mellgard are the Associate Editors of The WorldPost. Katie Nelson is the National Editor at the Huffington Post, overseeing The WorldPost and HuffPost’s editorial coverage. Eline Gordts is HuffPost’s Senior World Editor. Charlotte Alfred and Nick Robins-Early are Associate World Editors.

CORRESPONDENTS: Sophia Jones in Istanbul; Matt Sheehan in Beijing.

EDITORIAL BOARD: Nicolas Berggruen, Nathan Gardels, Arianna Huffington, Eric Schmidt (Google Inc.), Pierre Omidyar (First Look Media) Juan Luis Cebrian (El Pais/PRISA), Walter Isaacson (Aspen Institute/TIME-CNN), John Elkann (Corriere della Sera, La Stampa), Wadah Khanfar (Al Jazeera), Dileep Padgaonkar (Times of India) and Yoichi Funabashi (Asahi Shimbun).

CONTRIBUTING EDITORS: Moises Naim (former editor of Foreign Policy), Nayan Chanda (Yale/Global; Far Eastern Economic Review) and Katherine Keating (One-On-One). Sergio Munoz Bata and Parag Khanna are Contributing Editors-At-Large.

The Asia Society and its ChinaFile, edited by Orville Schell, is our primary partner on Asia coverage. Eric X. Li and the Chunqiu Institute/Fudan University in Shanghai and Guancha.cn also provide first person voices from China. We also draw on the content of China Digital Times. Seung-yoon Lee is The WorldPost link in South Korea.

Jared Cohen of Google Ideas provides regular commentary from young thinkers, leaders and activists around the globe. Bruce Mau provides regular columns from MassiveChangeNetwork.com on the “whole mind” way of thinking. Patrick Soon-Shiong is Contributing Editor for Health and Medicine.

ADVISORY COUNCIL: Members of the Berggruen Institute’s 21st Century Council and Council for the Future of Europe serve as the Advisory Council — as well as regular contributors — to the site. These include, Jacques Attali, Shaukat Aziz, Gordon Brown, Fernando Henrique Cardoso, Juan Luis Cebrian, Jack Dorsey, Mohamed El-Erian, Francis Fukuyama, Felipe Gonzalez, John Gray, Reid Hoffman, Fred Hu, Mo Ibrahim, Alexei Kudrin, Pascal Lamy, Kishore Mahbubani, Alain Minc, Dambisa Moyo, Laura Tyson, Elon Musk, Pierre Omidyar, Raghuram Rajan, Nouriel Roubini, Nicolas Sarkozy, Eric Schmidt, Gerhard Schroeder, Peter Schwartz, Amartya Sen, Jeff Skoll, Michael Spence, Joe Stiglitz, Larry Summers, Wu Jianmin, George Yeo, Fareed Zakaria, Ernesto Zedillo, Ahmed Zewail, and Zheng Bijian.

From the Europe group, these include: Marek Belka, Tony Blair, Jacques Delors, Niall Ferguson, Anthony Giddens, Otmar Issing, Mario Monti, Robert Mundell, Peter Sutherland and Guy Verhofstadt.


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