EU-IMF experts resume Greek audit
Greece's finance minister met on Thursday with EU-IMF auditors who have resumed an audit in Athens that was interrupted last month, and said details would be available once a comprehensive agreement had been reached.
"Nothing will be sealed until everything is sealed," Finance Minister Yannis Stournaras said after speaking with representatives from the European Union, International Monetary Fund and European Central Bank, a group of creditors known as the troika.
Stournaras told journalists that the atmosphere in the meeting, which lasted more than three hours, was "good" and that further meetings were scheduled on a daily basis.
"There is still work to be done," Stournaras was reported by the Athens News Agency to have added.
The inspection of Greek reforms was initially suspended to give the Greek government time to work on outstanding matters, and attention then turned to the banking crisis in Cyprus.
Pending issues reportedly include the thorny issues of civil service job cuts and a revised property tax.
The auditors' report is required to release a €2.8bn ($3.6bn) rescue loan that has been delayed since March.
Another loan payment of €6.0bn, originally scheduled for the first quarter of 2013, will have to be postponed until at least mid-April.
According to the terms of its bailout deal, Greece has to cut the number of public sector workers by 25 000 this year and by 150 000 by the end of 2015.
The heavily-indebted country, which has been relying on international aid to avoid bankruptcy and is in its sixth year of recession, must also recapitalise its banks and speed up privatisation plans.
"Our goal is for 2013 to be the final year of recession," conservative Prime Minister Antonis Samaras said on Thursday.
Samaras is under pressure from his two coalition government partners, the socialists and moderate leftists, to ease the tax burden as the country suffers through a fourth year of austerity.
We can't replace government action - ECB
The European Central Bank cannot step into the breach left by a lack of action by eurozone governments to solve the region's debt crisis, but is ready to do whatever it can to play its part, ECB chief Mario Draghi said on Thursday.
"We cannot replace lack of capital in the banking system or the lack of actions by governments," Draghi told a news conference after the ECB left its interest rates unchanged for the ninth month in a row.
"The most stimulative measure is to pay the arrears. The ECB cannot replace governments on that front, or on structural reforms," he said.
Nevertheless, the ECB was willing and ready to act and looking at all policy options, both standard and non-standard, to help resolve the crisis, Draghi insisted.
"We are ready to act within our mandate," he said.
With regard to non-standard or anti-crisis measures, "we discussed a variety of measures. We have to be aware of what we can do and what we cannot do," Draghi said.
The ECB was also open to taking on board the experiences of other countries in trying to solve the eurozone's problems, he said.
"We will certainly look at other countries' experiences, what is feasible, institutionally acceptable and effective," he said. "We are thinking 360 degrees on non-standard measures," Draghi said.
Throughout the seemingly never-ending crisis - which appeared to have abated recently until political gridlock in Italy and the crisis in Cyprus sent shockwaves through financial markets once again - the ECB has never hesitated to act as firefighter.
It has slashed its key interest rates, pumped more than €1.0 trillion ($1.3 trillion) into the banking system to avert a credit crunch and sought to tame borrowing costs in worst-hit countries by buying up their sovereign bonds.
The multi-faceted approach appeared to pay off, allowing the markets to enjoy an extended period of calm.
But calls have arisen for the ECB to come to the rescue once again as tensions re-emerged after elections in Italy ended in a political stalemate and Cyprus's parliament rejected the terms of a tough bailout deal with its international creditors.
Finding a solution was not easy, and would require the participation of all actors, Draghi insisted.
Bank of England keeps rates at record low
The Bank of England on Thursday voted to leave its main lending rate at a record-low level of 0.50% and refrained from pumping out more new cash to help stimulate Britain's recession-threatened economy.
"The Bank of England's Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%," the BoE said in a brief statement at the conclusion of a regular monthly meeting, whose minutes will be published on April 17.
Thursday's outcome had been widely predicted by markets, which expected the BoE to wait for official data later this month to see whether Britain's economy has re-entered a period of recession.
With Britain struggling to sustain economic recovery following the 2008 global financial crisis, the BoE's main lending rate has stood at 0.50% for more than four years.
The central bank has meanwhile pumped out £375bn of new money under its quantitative easing (QE) stimulus programme since March 2009.
"Although the Monetary Policy Committee (MPC) left policy on hold again today, we suspect that the decision was still a close one," said Samuel Tombs at the Capital Economics research group.
BoE governor Mervyn King, who shortly steps down to be replaced by Canadian central bank chief Mark Carney in July, has in recent months unsuccessfully called for an additional £25bn of stimulus along with two other of the MPC's nine members.
"It is likely that BoE governor King, along with Paul Fisher and David Miles voted to expand QE by a further £25bn" at Thursday's meeting, said ING Bank analyst James Knightley.
Recent official data revealed that British gross domestic product (GDP) shrank 0.3% in the fourth quarter of 2012 compared with the previous three months.
Another contraction in the first quarter of 2013 would place Britain in its third recession in under four years.
Cypriot bank staff boycotts bailout
Hundreds of Cypriot bank workers marched
peacefully toward parliament on Thursday over fears that their jobs and
pensions are at risk under an international bailout deal.
Bank employees earlier staged a two-hour walk-out, with unions saying
that pension deposits at the now defunct Laiki bank totaling €27m ($34.7m) will
be wiped out, while another €15m at the Bank of Cyprus will face losses of up
to 60%.Two of the country's banks are to be restructured in exchange for a €10bn ($12.8bn) bailout from the European Commission, European Central Bank and International Monetary Fund.
With one of the banks being wound down, retrenchments are expected, while the pension fund for more than 11 000 banking sector workers is also seen to be at risk.
Banks have been operating under strict capital controls since they reopened a week ago.
European Central Bank chief Mario Draghi conceded on Thursday that a failed attempt last month to tax small depositors in Cyprus as part of a bailout was "not smart".
Asked if it had been a mistake for the ECB to agree to the levy after Nicosia proposed it in negotiations, Draghi told reporters: "It was not a smart move and it was corrected the day after."
He insisted that the proposed levy on deposits under €100 000, which caused outrage in Cyprus and spooked financial markets, had never been part of the original ECB bailout proposals.
Pension fears grips Cyprus bank staff
Bank workers were to hold a work stoppage on Thursday over fears that pensions may be at risk under Cyprus's bailout, as the island looked set to top the agenda at a European Central Bank policy meeting.
Bank employees' union ETYK called the two-hour stoppage over concerns that pension funds at Laiki and Bank of Cyprus are not being protected under the island's €10bn ($12.8bn) bailout deal with the International Monetary Fund, European Commission and ECB.
The strike comes despite reassurances last week from President Nicos Anastasiades that every effort would be made to preserve pension funds at the two banks.
There has been no labour unrest in Cyprus so far, but the terms of the bailout will force the island to make painful reforms, raising taxes, downsizing the public-sector workforce, privatising some state-owned firms and drastically reducing the size of its bloated banking sector.
The country's new Finance Minister Haris Georgiades vowed on Wednesday to implement the bailout terms in full.
"We... shall do whatever it takes to fix our public finances and put our economy back on track for growth," he said after swearing in to his new post.
Georgiades, a British-educated economist who had been serving as labour minister, took over from Michalis Sarris, who announced on Tuesday he was resigning to cooperate with a judicial probe into the causes of the crisis.
Sarris had been chairperson last year of failed bank Laiki, the collapse of which was a major contributor to the crisis.
Cyprus is already in recession, with unemployment at around 15% and expected to grow sharply this year and next. Forecasts before the deal was agreed saw GDP contracting by 3.5% this year.
Banks have been operating under stringent capital controls since they reopened last Thursday, after a near two-week lockdown prompted by fears of a run on deposits.
The central bank has been progressively easing these restrictions, and has now raised the limit on business transactions from €5 000 to €25 000 and allowed people to write cheques of up to €9 000.
But under the terms of the deal, those with savings larger than €100 000 in Bank of Cyprus, the country's largest, face losing up to 60% of their deposits over that amount.
Those in second lender Laiki will have to wait years to see any of their money over €100 000 as the bank is shuttered.
Cyprus was expected to top the agenda at the European Central Bank's policy meeting in Frankfurt on Thursday.
Markets panicked when Eurogroup chief Jeroen Dijsselbloem appeared to suggest that the Cyprus deal which rattled world markets might be used as a template for future eurozone bailouts.
The consequences of the Cyprus bailout for the eurozone were expected to be the main focus of ECB chief Mario Draghi's's monthly post-meeting news conference.
On the political front, Turkish President Abdullah Gul said on Wednesday the crisis was a chance to work towards a peace deal on the island, divided since Turkish troops invaded its northern third in 1974 after a Greek Cypriot coup.
"The economic crisis should also be an important lesson to all of us because at the end of the day if the island were united then there would be a greater economic potential," he said.
Clinton to pen her views on the US
Hillary Clinton, whose every move is being
scrutinised for signs that she might make a 2016 presidential run, announced on
Thursday she's penning a book outlining her views on the United States' role in the world.
The ex-secretary of state's first book since leaving office will be
published by Simon & Schuster in the summer of 2014, midway through
President Barack Obama's final term, the publisher said."This will be the ultimate book for people who are interested in world affairs and America's place in the world today," said Jonathan Karp, publisher of Simon & Schuster Publishing Group, and who is set to edit the work himself.
No title was announced, nor details of how much former president Bill Clinton's wife would be paid.
The publisher's CEO Carolyn Reidy said Hillary Clinton would "bring readers worldwide her unique insights into the most dramatic events and critically important issues of our time."
Topics covered will include the killing of Osama bin Laden, the US pullouts from Iraq and Afghanistan, the Arab Spring revolts, and the rise of China.
Broad issues including the role of women and girls, climate change, and human rights will also be addressed, the publisher said in a statement.
"And she will share her views as to what it takes for the United States to secure and sustain prosperity and global leadership. Throughout, Secretary Clinton will offer vivid personal anecdotes and memories of her collaboration with President Obama and his National Security team, as well as her engagement with leaders around the world," the statement said.
Clinton has stayed coy about her plans in 2016, but she is seen as a clear frontrunner this time, having lost the Democratic nomination in 2008 to Obama, who went on to become America's first black president.
Polls show that Clinton, who would be 69 in 2016, has strong support among Democrats should she bid to become the first woman elected to the White House.
Kerry returning to Middle East
US Secretary of State John Kerry is headed back
to the Middle East for his third trip in a month, foraging for signs that Israel and the Palestinians
are ready to make tough sacrifices for peace.
In a surprise move, the State Department announced on Wednesday that Kerry will return to Jerusalem and the Palestinian territories early next week to build on a series of talks last month between American and regional leaders.
Expectations are growing that the US administration is ready to resume some kind of shuttle diplomacy to rekindle the moribund peace process, which has stalled since late 2010 amid bitter recriminations on both sides.
But State Department spokesperson Victoria Nuland cautioned: "I would not expect the secretary to be putting down a plan."
President Barack Obama visited Israel and the West Bank in mid March, with Kerry then staying behind in the region to meet separately with both Israeli Prime Minister Benjamin Netanyahu and Palestinian president Mahmoud Abbas.
"They've had some time to reflect on the visit," Nuland said. "So this a chance for the secretary to go back and to listen again and to hear what they think is possible."
Apology to Turkey
"But he'll also be making clear that the parties themselves have to want to get back to the table, that this is a choice that they have to make, and that they've also got to recognise, both parties, that compromise and sacrifices are going to have to be made if we're going to be able to help."
Kerry will start his trip with a visit to Istanbul this weekend, with the 2-year-old conflict in Syria that has cost more than 70 000 lives set to top the agenda of talks with senior Turkish officials.
Nuland would not go into details about the talks on Sunday, but many of the top Syrian opposition leaders are based in Istanbul and he may seek to carve out some time to meet them.
Kerry's latest trip to Turkey also comes after Israel apologised to Ankara in late March for the deaths of nine Turkish activists in a botched raid by Israeli commandos on a Gaza-bound aid ship.
The breakthrough brokered by Obama ended a nearly three-year rift between Israel and Ankara - both key regional US allies.
Kerry will head to Israel and the Palestinian territories on Monday and Tuesday for separate talks with Netanyahu and Abbas, Nuland said.
Stage set
The stops have been added to a previously announced trip during which Kerry will also travel to London for a meeting of G8 foreign ministers before heading to Asia for the first time as America's new top diplomat.
On his first overseas trip since taking up the post on 1 February, Kerry visited Egypt in early March for talks with President Mohammed Morsi.
Kerry has stressed he would like to find a path forward in the peace process which has bogged down for decades.
"I think the stage has been set for the possibilities that the parties can hopefully find a way to negotiations," Kerry said in Baghdad after meeting Netanyahu and Abbas.
Direct peace talks broke down just weeks after Obama made a failed bid to bring the sides together in September 2010 in a bitter row over Israel's settlement building.
Since then, the Palestinians have refused to return to the table without a settlement freeze while Israel has agreed to resume talks only if there are no preconditions.
Freeing of prisoners
Nuland refused to speculate on Wednesday on whether Kerry would try to lay out any confidence-building measures to kickstart the talks in his next round of talks.
But Abbas said on Wednesday that the freeing of prisoners held by Israel was a "priority" for the leadership in the West Bank.
"We cannot be silent about their staying behind bars... [we] have demanded the freeing of all prisoners, especially those arrested before the Oslo accords, and sick, child and women prisoners," he told his Fatah party.
Clashes broke out in the West Bank earlier in the day between Israeli soldiers and Palestinians protesting the death of a Palestinian prisoner serving a life sentence in an Israeli jail.
A 16-year-old Palestinian was killed by Israeli soldiers and two others were wounded in the unrest.
In a surprise move, the State Department announced on Wednesday that Kerry will return to Jerusalem and the Palestinian territories early next week to build on a series of talks last month between American and regional leaders.
Expectations are growing that the US administration is ready to resume some kind of shuttle diplomacy to rekindle the moribund peace process, which has stalled since late 2010 amid bitter recriminations on both sides.
But State Department spokesperson Victoria Nuland cautioned: "I would not expect the secretary to be putting down a plan."
President Barack Obama visited Israel and the West Bank in mid March, with Kerry then staying behind in the region to meet separately with both Israeli Prime Minister Benjamin Netanyahu and Palestinian president Mahmoud Abbas.
"They've had some time to reflect on the visit," Nuland said. "So this a chance for the secretary to go back and to listen again and to hear what they think is possible."
Apology to Turkey
"But he'll also be making clear that the parties themselves have to want to get back to the table, that this is a choice that they have to make, and that they've also got to recognise, both parties, that compromise and sacrifices are going to have to be made if we're going to be able to help."
Kerry will start his trip with a visit to Istanbul this weekend, with the 2-year-old conflict in Syria that has cost more than 70 000 lives set to top the agenda of talks with senior Turkish officials.
Nuland would not go into details about the talks on Sunday, but many of the top Syrian opposition leaders are based in Istanbul and he may seek to carve out some time to meet them.
Kerry's latest trip to Turkey also comes after Israel apologised to Ankara in late March for the deaths of nine Turkish activists in a botched raid by Israeli commandos on a Gaza-bound aid ship.
The breakthrough brokered by Obama ended a nearly three-year rift between Israel and Ankara - both key regional US allies.
Kerry will head to Israel and the Palestinian territories on Monday and Tuesday for separate talks with Netanyahu and Abbas, Nuland said.
Stage set
The stops have been added to a previously announced trip during which Kerry will also travel to London for a meeting of G8 foreign ministers before heading to Asia for the first time as America's new top diplomat.
On his first overseas trip since taking up the post on 1 February, Kerry visited Egypt in early March for talks with President Mohammed Morsi.
Kerry has stressed he would like to find a path forward in the peace process which has bogged down for decades.
"I think the stage has been set for the possibilities that the parties can hopefully find a way to negotiations," Kerry said in Baghdad after meeting Netanyahu and Abbas.
Direct peace talks broke down just weeks after Obama made a failed bid to bring the sides together in September 2010 in a bitter row over Israel's settlement building.
Since then, the Palestinians have refused to return to the table without a settlement freeze while Israel has agreed to resume talks only if there are no preconditions.
Freeing of prisoners
Nuland refused to speculate on Wednesday on whether Kerry would try to lay out any confidence-building measures to kickstart the talks in his next round of talks.
But Abbas said on Wednesday that the freeing of prisoners held by Israel was a "priority" for the leadership in the West Bank.
"We cannot be silent about their staying behind bars... [we] have demanded the freeing of all prisoners, especially those arrested before the Oslo accords, and sick, child and women prisoners," he told his Fatah party.
Clashes broke out in the West Bank earlier in the day between Israeli soldiers and Palestinians protesting the death of a Palestinian prisoner serving a life sentence in an Israeli jail.
A 16-year-old Palestinian was killed by Israeli soldiers and two others were wounded in the unrest.
Isolated South Koreans tough it out
Fear and anxiety are spreading among hundreds
of South Korean workers sitting 10km inside North Korea and trying to ride out a growing military crisis that is edging ever
closer.
The Kaesong joint industrial area, the last remaining symbol of inter-Korean co-operation, has become a pawn in an increasingly dangerous, high-stakes game of brinkmanship between Pyongyang, Seoul and Washington.
A day after it blocked South Koreans from accessing the complex, Pyongyang on Thursday threatened to pull out the 53 000 North Korean workers who keep the South Korean factories in Kaesong running, and to shut it down entirely.
Although allowed to leave Kaesong, about 800 South Korean managers and staff have opted to stick it out for now, as dire threats of nuclear war and retaliation fly back and forth over their heads.
"The anxiety is really ramping up," said Kwon Sook-Mi, who decided to leave the mobile phone plant in Kaesong where she works and cross back into South Korea on Thursday morning.
"There's a lot of uncertainty and some people are finding it mentally very tough," Kwon, aged 37, said.
Supplies running low
By contrast, Kwon said she had seen "no particular change" in the attitude of the North Korean workers at her plant since the crisis began.
Kim Won-Soo, the manager of a footwear plant, said his company was running out of supplies, both for the assembly lines and employees.
"We'll have to stop operating soon as we're almost out of raw materials," said Kim, who crossed back to the South with another group in the afternoon.
"Food supplies are also low, and stocks in the local supermarkets are way down. It's going to be noodles from tomorrow," he added.
On the South Korean side of the border crossing near Paju city, around 100 people and 40 trucks turned up early in the hope of the access ban being lifted on Thursday.
Drivers, managers and workers huddled in small groups, discussing the situation, with much of the talk focused on how long the 123 South Korean companies in Kaesong can keep going.
Political games
"Time is going to run out very fast," said Ryu Koon-Sung, who works for a female underwear company, Young Inner Foam, in Kaesong.
"If I can't get the material packed in this truck over, then we're going to have to stop production in a few days," Ryu said.
At 08:30, the expected announcement was broadcast over loudspeakers: "Entry into Kaesong is impossible today". The trucks began turning away, although some drove straight to an adjacent car park to try again on Friday.
"Kaesong should not become a scapegoat for political games," Ryu said, shaking his head.
South Koreans in general have grown accustomed to the North's threats and provocations over the years.
Even now, there is some anxiety but little panic - in contrast to 1994, when a North Korean negotiator threatened to turn Seoul into "a sea of fire" and people stripped store shelves and bunkered down.
These days Seoulites, especially the young, largely shrug off such threats and the bars and clubs of the upscale Gangnam district remain as popular as ever.
Haven of co-operation in danger
The stock market is also remarkably resilient, down barely 1% since the war rhetoric intensified two weeks ago.
In the Customs, Immigration and Quarantine hall of the Paju border crossing, a slightly desperate Han Jae-Kwon, head of the association that represents the companies in Kaesong, urged an end to the impasse.
"Operations in the complex are in serious trouble because of North Korea's ban... and there is fear and apprehension that the complex could be shut down permanently," Han said.
Han spoke in front of a banner reading: "We appeal for normalisation of passage to Kaesong" - a simple, plaintive message compared to the bellicose rhetoric emanating from Pyongyang.
Han said production had already ceased at a few smaller plants and others would run out of food within a week, as well as gas for heating and cooking.
Kim Deok-Chul, who was trying to cross into Kaesong to reach his textile company, said the complex risked losing its special status as a haven of co-operation that has always weathered political storms.
"Kaesong is a place where people from both side communicate," Kim said. "Both sides should make concessions and keep this area as it is."
The Kaesong joint industrial area, the last remaining symbol of inter-Korean co-operation, has become a pawn in an increasingly dangerous, high-stakes game of brinkmanship between Pyongyang, Seoul and Washington.
A day after it blocked South Koreans from accessing the complex, Pyongyang on Thursday threatened to pull out the 53 000 North Korean workers who keep the South Korean factories in Kaesong running, and to shut it down entirely.
Although allowed to leave Kaesong, about 800 South Korean managers and staff have opted to stick it out for now, as dire threats of nuclear war and retaliation fly back and forth over their heads.
"The anxiety is really ramping up," said Kwon Sook-Mi, who decided to leave the mobile phone plant in Kaesong where she works and cross back into South Korea on Thursday morning.
"There's a lot of uncertainty and some people are finding it mentally very tough," Kwon, aged 37, said.
Supplies running low
By contrast, Kwon said she had seen "no particular change" in the attitude of the North Korean workers at her plant since the crisis began.
Kim Won-Soo, the manager of a footwear plant, said his company was running out of supplies, both for the assembly lines and employees.
"We'll have to stop operating soon as we're almost out of raw materials," said Kim, who crossed back to the South with another group in the afternoon.
"Food supplies are also low, and stocks in the local supermarkets are way down. It's going to be noodles from tomorrow," he added.
On the South Korean side of the border crossing near Paju city, around 100 people and 40 trucks turned up early in the hope of the access ban being lifted on Thursday.
Drivers, managers and workers huddled in small groups, discussing the situation, with much of the talk focused on how long the 123 South Korean companies in Kaesong can keep going.
Political games
"Time is going to run out very fast," said Ryu Koon-Sung, who works for a female underwear company, Young Inner Foam, in Kaesong.
"If I can't get the material packed in this truck over, then we're going to have to stop production in a few days," Ryu said.
At 08:30, the expected announcement was broadcast over loudspeakers: "Entry into Kaesong is impossible today". The trucks began turning away, although some drove straight to an adjacent car park to try again on Friday.
"Kaesong should not become a scapegoat for political games," Ryu said, shaking his head.
South Koreans in general have grown accustomed to the North's threats and provocations over the years.
Even now, there is some anxiety but little panic - in contrast to 1994, when a North Korean negotiator threatened to turn Seoul into "a sea of fire" and people stripped store shelves and bunkered down.
These days Seoulites, especially the young, largely shrug off such threats and the bars and clubs of the upscale Gangnam district remain as popular as ever.
Haven of co-operation in danger
The stock market is also remarkably resilient, down barely 1% since the war rhetoric intensified two weeks ago.
In the Customs, Immigration and Quarantine hall of the Paju border crossing, a slightly desperate Han Jae-Kwon, head of the association that represents the companies in Kaesong, urged an end to the impasse.
"Operations in the complex are in serious trouble because of North Korea's ban... and there is fear and apprehension that the complex could be shut down permanently," Han said.
Han spoke in front of a banner reading: "We appeal for normalisation of passage to Kaesong" - a simple, plaintive message compared to the bellicose rhetoric emanating from Pyongyang.
Han said production had already ceased at a few smaller plants and others would run out of food within a week, as well as gas for heating and cooking.
Kim Deok-Chul, who was trying to cross into Kaesong to reach his textile company, said the complex risked losing its special status as a haven of co-operation that has always weathered political storms.
"Kaesong is a place where people from both side communicate," Kim said. "Both sides should make concessions and keep this area as it is."
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