Don't forget the eurozone: Citigroup peg probability of Grexit at 90%

ECB President says he'll do "whatever it takes" to save the euro.

Remember the eurocrisis? It didn't go away, we've just all been nicely distracted by bread and circuses. And while no-one was looking, it's been getting steadily worse.

A research note from Citigroup's chief economist, William Buiter, now puts the chance of a Greek exit from the eurozone at 90 per cent:

We now believe the probability that Greece will leave EMU in the next 12-18 months is about 90%, up from our previous 50-75% estimate, and believe the most likely date is in the next 2-3 quarters. As before, for the sake of argument, we assume that “Grexit” occurs on 1 January 2013, but we stress this is an assumption rather than a forecast of the precise date. Even with the Spanish bank bailout, we continue to expect that both Spain and Italy are likely to enter some form of Troika bailout for the sovereign by the end of 2012. . .

The EA end-game is likely to be a mix of EMU exit (Greece), a significant amount of sovereign debt and bank debt restructuring (Portugal, Ireland and, eventually, perhaps Italy, Spain and Cyprus) with only limited fiscal burden-sharing.

The attention of the world has absolutely been elsewhere; while the mainstream press has moved on to the Olympics, the financial pages have been just as focused on the news from America. But just because there are more novel problems happening in other countries, doesn't mean that any of the underlying problems of the eurozone have been fixed.

Greece is still suffering debilitating capital flight, as people steadily transfer as much of their money to safe havens as possible. The banking systems of the periphery countries – now closer to PIICS than PIIGS, as Greece graduates to a class of its own and Cyprus takes its place – are suffering under their own stresses, and the repeated bailouts push the structural problems underground for ever-shorter periods.

Mario Draghi, the ECB's President, has not be so distracted. At a press conference today, he announced the ECB would do "whatever it takes" to preserve the euro, adding "believe me, that will be enough". And enough it may be, for in the strange world of monetary policy, a committment to action is itself a form of action. If Draghi is believed – and that is a big if – then merely promising to do whatever it takes can be enough to end some of the capital flight and general unease which he has to tackle.

We will see whether expectations have been thus managed.

Mario Draghi, the head of the ECB. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Why Philip Green's fall should bring down the honours system – but won't

Sir Shifty may fall in disgrace, but our ridiculous system will endure. No matter what's happening in the rest of politics.

Sir Philip Green’s Efficiency Review (2010) is his Das Kapital and it is still, happily, online. You can, if you wish, smirk at his recommendations to the government, which were solicited by David Cameron, I imagine, because when he stood next to Green he looked not like a 17th-century woodcut but like a tall, handsome semi-aristocrat.

“There is no motivation to save money or to treat cash ‘as your own’,” Green grumbles, before complaining, “There are inconsistent commercial skills across departments.” I am weeping with laughter at the whole report. But I’m not one of those BHS employees watching their pension ­vanish as the hideous cushions, throws and bedspreads pile up on the Green family yacht Lionheart. I instantly rename the yacht 14-Day Return Policy No More.

The days when Green could write efficiency reviews for people to ignore are gone. It is said that he could lose his knighthood, because that would be exciting and pointless. If so, I hope the ceremony features the formal rending of a garment from the BHS sale bin – perhaps a torn sock will be flung at his head? The Queen will not be happy, because de-knighting makes the ancient system of patronage look as ridiculous as it really is. Do intercessors between man and God make mistakes? Would they raise a man the Daily Mail now calls “Sir Shifty”? (I checked whether there was a Sir Shifty among the knights of the Round Table who flogged the Holy Grail to a passing tinker. There was not.)

Lord Melbourne advised Queen Victoria not to attempt to make her husband, Albert, a king, for if the people knew that they could make kings, they might unmake them. Green will discover this in his tiny way. But the elites should not hide their baubles. One fallen knight will not destroy the system (and I cannot think that Green will take £571m from his Lionheart cushion budget to save his knighthood by replenishing the BHS pension fund, because a knighthood is, in essence, just a tiny Bentley Continental that you wear over your nipple). One fallen knight should destroy the system but it won’t, because human conceit and docility are without end. Green will be shunned. Nothing will change.

One might have hoped that the Brexit vote would have alerted Cameron to the abyss between the electorate and the elected. (Even Alastair Campbell, chomping against Brexit, seemed to forget that he was as complicit in the alienation of voters as anyone else: government by sofa, teeth and war.) The response was glib, even for Cameron, a man so glib that I sometimes think he is a reflection in a pond. Brexit hit him like someone caught in a mild shower without an umbrella. He hummed at the lesson that history dealt him; he hummed as he left his page. It was the hum of the alpha Etonian caught out in a mistake, yes, but it was still a bloody hum.

His next act was to increase pay-offs to favoured courtiers against civil service advice and at public expense; then, it was reported, he nominated his spin doctor Craig Oliver and his former spin doctor Gabby Bertin for peerages, because the upper house needs more PRs. He has learned nothing. I wish him a relaxed retirement in which he will, apparently, write his four-page memoir, David Cameron: My Struggle (sub-subtitle: Eton Mess?). I hope he does not attempt to deny “the prosciutto affair”, because there is no need. It was not true. It was too pure a metaphor.

So the honours system, an essential part of our alienating politics, alongside dodgy donors, duck houses and George Galloway, endures in its worst form as conventional politics fails. It is a donkey sanctuary for political friends and Bruce Forsyth. I am not suggesting that everyone who has been honoured is dreadful – some lollipop ladies deserve to be patronised with an OBE (when there is no E any more), I am sure, and the lords, some of whom are excellent, are the functional opposition now – but the system can no longer be defended by the mirth potential of watching politicians ponder what light-entertainment celebrities might swing a marginal before being posthumously accused of rape. We must find something better before the house burns down. Perhaps a robust parliamentary democracy?

The problem is best expressed by the existence of a specialist consultancy called Awards Intelligence, which engages in “VIP brand-building” by soliciting awards. It sells “awards plans” from £795, which I could well imagine Philip Green perusing as he bobs about aboard Lionheart, were it not too late. The Awards Intelligence website tells us so much, though obliviously, about the narcissism of modern politics that I am tempted to reproduce it in full. But I will merely report that it asks:

"Did you know that you can join the House of Lords on a part-time basis as an Independent Crossbench Peer or a political peer affiliated to one of the main politial parties – even if you have ongoing work, family or community commitments!"

The message from Awards Intelligence, which boasts of a 50 per cent success rate, is clear: the legislature is part-time, it exists to “instil trust, add credibility and provide a platform for you to have your say” – and it can’t always spell “political”.

Sir Shifty and Awards Intelligence do not constitute the worst crisis in the history of honours, dreadful though they are. During the First World War the royal German cousins were stripped of their garters, so that British soldiers would not have to kill men of higher rank. But it is time for the Queen to stop pinning toys on nipples. They are part of a political system sweeping us, swiftly, towards the night.

This article first appeared in the 28 July 2016 issue of the New Statesman, Summer Double Issue