Richard Portes's picture
Affiliation: 
London Business School and CEPR

Voting history

ECB's quantitative easing

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Question 2:

Do you agree that the structure of the ECB's QE programme makes the Eurozone more fragile and increases the risk of one country leaving the euro?

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Answer:
Agree
Confidence level:
Confident

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Question 1:

Do you agree that the design of the ECB's QE programme reduces its effectiveness? 

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Answer:
Strongly Agree
Confidence level:
Very confident

Deal or no deal: The Greece standoff

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Question 3: Do you agree that implementation of the agreement will lead to an expected decrease in Greek debt repayments?

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Answer:
Disagree
Confidence level:
Confident
Comment:
Not at this stage. That might come in a third programme, but only if Greece has demonstrated with concrete measures that it is willing to do deep reforms.

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Question 2: Do you agree that Greece would be better off defaulting right now rather than signing to the agreement under consideration?

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Answer:
Disagree
Confidence level:
Confident
Comment:
Default would be default on the institutions: IMF, ECB, ESM. The ECB would be unable to accept GGBs as collateral, and ELA would cease. The capital of the banks would be hit severely, because they hold large amounts of GGBs. Much of their 'Tier 1' capital is effectively fictitious, because it is 'deferred tax assets'. The banks would collapse. The government would try to impose controls to stop capital flight, but the Greek administration is unlikely to be able to enforce them effectively. Grexit would bring a sharp devaluation, with little expansionary effect through trade (Greece is a relatively closed economy) and devastating balance-sheet effects for firms with debts in euros.

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Question 1:  

Do you agree that, on balance, the implementation of the agreement as outlined in media reports will have a non-trivial negative effect on Greek GDP?

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Answer:
Strongly Agree
Confidence level:
Extremely confident
Comment:
Tax increases, pension cuts in an environment of liquidity squeeze and highly oligopolistic product markets. Add huge uncertainty - this deal will be a short-run expedient. The recession that resumed at end-2014 and has carried into 2015H1 will intensify.

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