NEWS,10.01.2013

Greek unemployment rate tripples

Greece's unemployment rate climbed to a record 26.8% in October as the debt-laden country remained sunk in recession, data showed on Thursday.Greece's jobless rate has almost tripled since it started rising in September 2009 as the country's debt crisis became apparent, and is more than double the average rate in the 17-nation eurozone, which stood at 11.8% in November.Unemployment among youth aged 15-24 also touched a new record of 56.6% in October, compared with 22.1 percent in the same month four years ago, statistics service ELSTAT said.A record 1.34 million Greeks were without work in October, up 38% from the same month in 2011, it said.After months of uncertainty over its future in the eurozone, Greece has managed to avoid bankruptcy but its economy is still sinking under austerity policies imposed by foreign lenders as the price for continued aid. The influential IOBE think tank on Thursday projected the economy would shrink 4.6% this year, taking a slightly more pessimistic view than the government, which expects the contraction at 4.5%, and the country's foreign lenders, who see it at 4.2%.IOBE also predicted unemployment would rise further to 27.3% this year, which is set to be the sixth consecutive year of recession.However, spending cuts helped narrow the country's central government budget gap by 30% in 2012 to €15.91bn ($20.75 billion), the finance ministry said. The central government budget figure excludes key elements of the general government budget, which is the figure used by the European Union to assess Greece's fiscal performance under its latest EU/IMF bailout programme.

Up to half of world's food wasted

Up to half of all the food produced worldwide ends up going to waste due to poor harvesting, storage and transport methods as well as irresponsible retailer and consumer behaviour, a report said on Thursday.The world produces about four billion metric tonnes of food a year but 1.2 to 2 billion tonnes is not eaten, the study by the London-based Institution of Mechanical Engineers said."This level of wastage is a tragedy that cannot continue if we are to succeed in the challenge of sustainably meeting our future food demands," said.In developed countries, like Britain, efficient farming methods, transport and storage mean that most of the wastage occurs through retail and customer behaviour.Retailers produce 1.6 million tonnes of food waste a year because they reject crops of edible fruit and vegetables because they do not meet exacting size and appearance criteria, the report by the engineering society said."Thirty percent of what is harvested from the field never actually reaches the marketplace (primarily the supermarket) due to trimming, quality selection and failure to conform to purely cosmetic criteria," it said.Of the food which does reach supermarket shelves, 30-50% of what is bought in developed countries is thrown away by customers, often due to poor understanding of "best before" and "use by" dates.A "use by" date is when there is a health risk associated with using food after that date. A "best before" date is more about quality - when it expires it does not necessarily mean food is harmful but it may lose some flavour and texture.However, many consumers do not know the difference between the labels and bin food after "best before" dates.Promotional offers and bulk discounts also encourage shoppers to buy large quantities in excess of their needs.In Britain, about £10.2bn ($16.3bn) worth of food is thrown away from homes every year, with £1bn worth being perfectly edible, the report found.By contrast, in less developed countries, such as in sub-Saharan Africa or South East Asia, wastage mostly happens due to inefficient harvesting and poor handling and storage.In South-East Asian countries, for example, losses of rice range from 37-80% of their entire production, totalling about 180 million tonnes per year, the report said.The United Nations predicts global population will peak at around 9.5 billion people by 2075, meaning there will be an additional 2.5 billion people to feed.The rising population, together with improved nutrition and shifting diets will put pressure for increases in global food supply over the coming decades.Rising food and commodity prices will drive the need to reduce waste, making the practice of discarding edible fruit and vegetables on cosmetic grounds less economically viable.However, governments should not wait for food pricing to trigger action on this wasteful practice, but produce policies that change consumer behaviour and dissuade retailers from operating in this way, the study said.Rapidly developing countries like China and Brazil have developed infrastructure to transport crops, gain access to export markets and improve storage facilities but they need to avoid the mistakes made by developed nations and make sure they are efficient and well-maintained.Poorer countries require significant investment to improve their infrastructure, the report said. For example, Ethiopia is considering developing a national network of grain storage facilities which is expected to cost at least $1bn."This scale of investment will be required for multiple commodities and in numerous countries, and co-ordinated efforts are going to be essential," the report said.

US pumps record high into govt coffers

The Federal Reserve pumped a record $88.9bn into the US Treasury last year, the spoils of big profits made on its vast holdings of securities, the US central bank said on Thursday.The Fed said the money was earned primarily from interest payments on the securities in its multi-trillion dollar portfolio of US government debt and bonds related to the housing industry.Each year, the central bank sends its earnings, minus operating costs and other expenses, to the Treasury.The 2012 figure eclipsed the prior record of $79.3bn deposited into government coffers in 2010.The Fed estimated its net income for last year at $91 billion.

US jobless claims rise

The number of Americans filing new claims for unemployment benefits rose last week, but seasonal volatility makes it difficult to get a clear picture of the labour market's health.Initial claims for state unemployment benefits increased 4 000 to a seasonally adjusted 371 000, the Labor Department said on Thursday. The prior week's figure was revised to show 5 000 fewer applications than previously reported. Claims tend to be very volatile around this time of the year because of the holidays and seasonal layoffs. While they increased last week, there was nothing in the data to suggest a deterioration in labor market conditions. The four-week moving average for new claims, a better measure of labor market trends, increased 6 750 to 365 750, still at a level consistent with steady job gains.A Labour Department official said there was nothing unusual in state level data and that no states had been estimated. He noted, however, that jobless claims on an unadjusted basis tend to peak in the second week of January and the rise in the week ended Jan. 5 was a build-up to that.The labor market has been gradually improving, with job gains last year averaging 153 000 per month, little changed from 2011. That has not been enough to significantly cut the unemployment rate which ended the year at 7.8%.The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid tumbled 127 000 to 3.11m in the week ended Dec 29, the lowest level since July 2008.The weekly decline was the largest since January 2011.The insured unemployment rate fell to 2.4%, its lowest since July 2008.

Gold worsens global health

High gold prices are driving up the use of toxic mercury in small-scale mining in developing nations, spreading a poison that can cause brain damage in children thousands of miles away, a UN study showed on Thursday. Negotiators from 120 nations will meet in Geneva next week for a final round of talks meant to agree a treaty to reduce the use of mercury. It is mainly emitted by gold mining, where it helps separate gold from ore, and by coal-fired power plants. A leap in gold prices to almost $1 700 an ounce from $400 less than a decade ago has spurred a surge in small-scale gold mining in South America, Africa and Asia which employs up to 15 million people, the UN Environment Programme (UNEP) said. Workers risk acute poisoning and, released to the air or washed into rivers and the oceans, mercury emissions spread worldwide. Mercury, a liquid metal also known as quicksilver, can cause harm especially to the brains of foetuses and infants. "Exposing infants and mothers to mercury is a cruel and increasingly unnecessary risk," Achim Steiner, head of UNEP, told Reuters by telephone from Nairobi, adding that there were cleaner alternatives to mercury in mining. "A Chinese baby born today, just like an American or a Japanese or a Brazilian one, really shouldn't be condemned to have neurological damage as a result of mercury," Steiner said."The very high gold price has ... brought more people, especially at the poorest end of society, into the gold mining sector," Steiner said. UNEP said damage to health and the environment was increasing as a result. Emissions of mercury from artisanal and small-scale gold mines more than doubled to 727 tonnes in 2010 from 2005 levels and now made up 35% of the global total, UNEP said. Part of the surge reflected better data - some mines in operation for years had been unknown, such as in West Africa.Eating fish is the main way mercury builds up in humans. It enters rivers and the oceans and accumulates as methylmercury in the bodies of fish, especially big predators such as swordfish, shark, king mackerel, tuna and sea bass.The report estimated that human emissions of mercury totalled almost 2 000 tonnes in 2010, mostly from Asian nations led by China. It said that level had been roughly stable for the past 20 years despite efforts for deeper cuts after a peak in the 1970s. Mercury also comes from natural sources such as volcanoes.The UN plan is to hold an international conference in late 2013 in Minamata, Japan, the site of one of the worst industrial releases in the 1950s, to approve a new convention to restrict mercury based on texts to be agreed in Geneva. Steiner expressed hopes that a UN convention would spur innovation by companies to cut mercury use. Technologies include filters for coal-fired power plants or substitutes in products such as thermometers, light bulbs and dental fillings. Many nations have tightened laws - the United States barred exports of mercury from January 1, 2013. The European Union, until 2008 the main global exporter, barred exports in 2011.UNEP's study did not provide an estimate for the overall health and environmental damage caused by mercury. UNEP spokesperson Nick Nuttall said that limiting dangerous metals such as mercury could have huge benefits. He noted that one study in 2011 put the benefits from phasing out another poison - lead in gasoline - at more than $2 trillion a year by reducing pollution linked to heart disease, diminished intelligence and even high crime rates.

ECB holds rates at record low of 0.75%

The European Central Bank held interest rates at a record low of 0.75% on Thursday, refraining from a cut following fledgling signs of life in the eurozone economy and with inflation still above target.The 17-country eurozone is in recession but recent data points to some stabilisation. Last month, ECB President Mario Draghi said there was "a wide discussion" on reducing rates - a comment that fed expectations a cut could soon follow. But hawkish remarks from a clutch of senior policymakers since have dampened that talk."This is not a surprise given some of the recent comments from the board, which did seem to play down the recent focus on interest rates," Nomura economist Nick Matthews said of Thursday's rate decision.The euro rose against the US dollar after the decision to $1.3115 from $1.3096 beforehand.New ECB Executive Board member Yves Mersch said last month he did not see the logic of a debate about the ECB cutting its main rate and Peter Praet said there was little room to cut.Stronger survey data appeared to have strengthened the resolve of those at the ECB against a rate cut, Matthews said.An improvement in eurozone business morale in December, when a survey also pointed to a slowing service sector contraction, suggests a modest turnaround in the bloc after a grim fourth quarter.Another cut of the refinancing rate would raise the question of whether the ECB would also lower its deposit rate - already at zero - by the same amount, which would push it into negative territory, essentially charging a fee for banks to park money with it, for the first time.Even though Draghi has said the bank was "operationally ready" for such a step, it has grown increasingly wary of the idea, a source with knowledge of the ECB's thinking said.Negative deposit rates could deal a hefty blow to money market funds, which have already seen cash outflows since the ECB cut the deposit rate to zero in July. The rate is a peg for short-dated money market rates and it is already almost impossible for funds to generate a return for their investors.Executive Board member Joerg Asmussen said last month he would be "very reluctant" about the ECB cutting the deposit rate any further. ECB staff projections published last month saw inflation at about 1.4% in 2014, which would usually justify another interest rate cut. The central bank also sees inflation falling below 2% this year with underlying price pressures remaining moderate.But inflation has eased more slowly than the ECB initially expected and as long as it misses the target - it has been above 2% for more than 2 years - a rate cut could be difficult to justify. In addition to gauging whether the ECB is entertaining another cut or not, Draghi will be pressed on other policy options, particularly to improve lacklustre bank lending. ECB data showed last week that bank lending to the private sector fell at an annual rate of 0.8% in November.At his December news conference, Draghi attributed the drop mainly to demand factors, but added that in a number of countries, credit supply is restricted.A move by global regulators to give banks more time and flexibility to build up cash reserves is expected to do little to support a recovery in Europe, where recession-hit firms and households have scant appetite for more debt. "One thing the ECB needs to engineer is recovery in lending," Rabobank economist Elwin de Groot said.A further question for Draghi will be how close he believes Ireland is to achieving the normalised market funding that would make it eligible for the ECB's new bond-buying programme."I would make the case but I'm not sure that the ECB would accept that case, but it's very close to it," John Corrigan, chief of Ireland's National Treasury Management Agency (NTMA) said on Wednesday.Meanwhile, the Bank of England also left its monetary policy settings unchanged on Thursday while it awaits clearer signals on the state of Britain's economy and more news on the progress of a key scheme to boost lending.After a two-day meeting, the BoE's nine-member Monetary Policy Committee (MPC) said its main interest rate would stay at a record-low 0.5% and it would not buy any government bonds on top of the £375bn purchased so far.

Global food prices drop 7% in 2012

Global food prices fell by 7% in 2012 from the level the previous year, the UN's Food and Agriculture Organisation said on Thursday, assuaging worries a few months ago that the world could be heading for a food crisis. The FAO added that prices had fallen in December for the third month in a row. The Rome-based FAO's Food Price Index averaged 212 points in 2012, a drop of 7% owing largely to falls in the prices of sugar, dairy products and oil.According to the FAO's index, a monthly measure of changes in a basket of food commodities, prices dropped in December by 1.1% to 209 points, down for the third month from the 263 points registered in August."The result marks a reversal from the situation last July, when sharply rising prices prompted fears of a new food crisis," said Jomo Sundaram from FAO's Economic and Social Development Department."But international coordination...as well as flagging demand in a stagnant international economy, helped ensure the price spike was short-lived and calmed markets so that 2012 prices ended up below the previous year’s levels," he said.The sharpest declines registered in 2012 were sugar (17.1%), dairy products (14.5%) and oils (10.7%), while price declines were much more modest for cereals (2.4%) and meat (1.1%).

French labour reform talks deadlock

French employers will consider some concessions in labour reform talks on Thursday but remain opposed to a key union demand to raise welfare charges on short-term contracts, their chief said as negotiations entered a final stretch.President Francois Hollande has called on business leaders and worker groups to strike a "historic deal" to overhaul France's labour market, helping firms to adjust their wage burden in a downturn and giving workers more job security.His Socialist government is pressing the parties to conclude a deal by January 15 as talks restart. A previous round broke up without an accord, with both sides accusing each other of making unacceptable demands.Hollande will introduce a draft law in the first quarter of 2013 regardless of whether a deal is struck. But without support from unions and employers, any law may face street protests and unions may push left-wing lawmakers to water it down."Tonight, we can reach a deal that puts France on par with the highest international standards in terms of flexi-security," Laurence Parisot, head of the Medef employers union, said on Europe 1 radio. "Anything less, there will be no deal."Flexi-security refers to a cooperative approach to labour relations widely used in northern Europe in which employees accept a degree of flexibility in working arrangements in return for employer commitments on job security.France wants to emulate that to address high unemployment and to eradicate the split in its jobs market between unflexible permanent contracts and short-term contracts increasingly used by employers but which offer workers little or no job security.Parisot said the Medef and its negotiating partner, the CGPME small- and medium-sized business group, would consider giving unions a voice and votes on company boards, and favoured making complementary health benefits automatic for workers.Unions say they could accept in-house deals allowing firms to temporarily cut work-hours during downturns, similar to arrangements in Germany. They may also accept the creation of new long-term job contracts with less iron-clad terms.However, union demands to impose higher welfare charges on short-term contracts remained a sticking point. Parisot said Medef was not prepared to extend talks beyond this week.Bernard Thibault, head of the hardline CGT union, said his group would not sign any deal in favour of de-regulation."What I can tell you is there is no way the CGT will approve the spirit of proposals from management's camp," he said.

Call for laws to protect domestic workers

Laws are "urgently" needed to give greater protection to domestic workers, the International Labour Organisation (ILO) said in its latest report on the state of domestic workers worldwide.In the report Domestic Workers Across the World, the ILO said the very nature of their work in private homes makes domestic workers less visible than other workers, and therefore more vulnerable to abusive practices.The report released on Wednesday showed significant growth in the sector in the 15 years from 1995 to 2010, with the number of people employed increasing by almost 20 million to 52.6 million.In 2010 domestic workers, 80% of whom are women, accounted for 1.7% of global employment.Despite this, many domestic workers are still not protected by laws that regulate working time, grant a minimum income or provide maternity protection, according to the report.It estimates that only about 10% of all domestic workers, about 5.3 million people, are covered by labour laws to the same degree as other workers.About 30% have no legal protection at all, the report said.The report however acknowledges that many countries in Africa, Latin America, the Caribbean and the industrialised world have already extended the same minimum protection which applies to workers generally to domestic workers. South Africa, for example, already regulates working times and respective hourly, weekly and monthly minimum wage rates, the report noted.The South African government last year announced a pay rise for all domestic workers with effect from December 1 2012. However, the SA Domestic Service and Allied Workers' Union accused the state of letting down domestic workers by not ratifying Convention 189 of the ILO. The convention advocates standardised working conditions, including minimum wages, rest hours, and leave for domestic workers. The report said the right to maternity protection is a key area of concern. “Women domestic workers are not entitled to maternity leave and associated maternity cash benefits. This poses a substantial obstacle for women domestic workers who wish to combine work with their own family responsibilities,” said the ILO.In addition to the lack of maternity benefits, the report highlights that there are no legal limits on weekly working hours for over half of the world's domestic workers, 45% are not guaranteed any weekly rest period and almost 50% have no minimum wage. South Africa, with more than 1.1 million domestic workers working for private households in 2010, is the biggest employer of domestic workers in southern Africa. The majority of workers are concentrated in Gauteng and KwaZulu-Natal, according to the report. The sector was also the third-largest employer for women in 2010, employing about 15.5% of all women workers.Employers from all races hire domestic workers. Although the government sets minimum wages and working hours, employers should also ensure they pay their workers a fair wage, said Dennis George, general secretary of the Federation of Unions of SA.George said employers should discuss realistic increases linked to the rising cost of living with their workers, as the minimum wage set by the government was only a guideline.Yendor Felgate, CEO of Emergence Growth Services, said the company's research into why so many employers fail to legalise their domestic service arrangements shows this is due to ignorance. “While most employers are keen to do the right thing, few are aware that that their two-day-a-week domestic worker qualifies as an employee," said Felgate.“Ultimately, it will be joint actions taken at the national level by governments, trade unions and employers that will bring decent work to the millions of domestic workers across the world,” said the ILO.

NEWS,11.07.2012

Swiss bank raided for foreign tax evaders

 

German tax authorities have launched raids into Credit Suisse clients and French officials searched the homes of UBS employees, part of crackdowns on foreigners suspected of evading taxes through the two largest Swiss banks.Switzerland's strict banking secrecy rules, which have helped build a $2 trillion offshore financial sector, have infuriated cash-strapped governments elsewhere as they try to stop tax evasion by wealthy citizens.Roughly 5,000 German clients of Credit Suisse are being probed on suspicion of tax evasion and some had their homes searched, a source at the bank said on Wednesday, as European tax officials broaden their investigation to clients from banks.Meanwhile, the offices of UBS in Lyon, Bordeaux and Strasbourg were raided on Tuesday on suspicion of money-laundering and aiding tax evasion, according to a source at that bank.The private homes of several high-ranking UBS employees in Strasbourg were also searched, the UBS source said.UBS said it was cooperating with authorities. The French prosecutor's office declined to comment because the investigation was ongoing.It was not immediately clear whether the raids in Germany and France were coordinated or in any way connected.Credit Suisse said it was aware that German tax authorities were investigating its clients but gave no further comment.The source at the bank said tax authorities in the German towns of Bochum and Duesseldorf were probing its clients over Bermuda-based life insurance products which may have been used to avoid tax. Tax officials in both towns declined to comment.The Frankfurt prosecutor said one client was searched.The German investigation comes against the backdrop of a deal reached with Switzerland to levy taxes on German assets stashed in Swiss bank accounts that is due to come into effect next year pending German parliament approval.Peter V. Kunz, professor for business law at Berne University, said the new investigation into Swiss bank clients could add to scepticism over the deal, which German opposition politicians say is too lenient on tax evaders."I don't think it will derail the agreement altogether, but it does simplify things for its opponents," Kunz said.Duesseldorf and Bochum are in the German state of North-Rhine Westphalia, where the Social Democrat-led regional government has been one of the most vocal opponents of the deal that would also end prosecutions of Swiss banks and employees."Our tax inspectors must be able to do their work unimpeded, which is to root out criminal evaders. No tax agreement should prevent that," the region's finance minister, Norbert Walter-Borjans, said in a statement.North-Rhine Westphalia bought names of Swiss bank clients from an informant in 2010. Two sources told Reuters the targets for the latest investigation were culled in part from that information.Germany has long been trying to crack down on tax evasion.In 2008, data leaked from Liechtenstein's LGT bank revealed that wealthy citizens including former Deutsche Post chief Klaus Zumwinkel had stashed money in the tiny principality.Zumwinkel received a suspended jail sentence after admitting tax evasion.Credit Suisse struck a deal with German tax authorities last September, agreeing to pay 150 million euros ($183.83 million) to end an investigation over allegations the bank and its employees helped Germans dodge taxes.UBS was forced in 2009 to pay a fine and release the names of 4,500 clients to US officials to end a damaging tax probe. US authorities are still investigating Swiss banks including Credit Suisse and Julius Baer over tax offences.Switzerland is trying to get the US investigations dropped in exchange for the payment of fines and the transfer of names of thousands more US bank clients.

 

Spain banks to minimise hit for investors

 

Spanish banks in line for European aid are looking at ways to minimise losses for small savers who will be forced to take a hit on certain bonds and shares they bought in the ailing lenders, under conditions enforced by Brussels.Although no overall figure for losses is yet clear due to uncertainties about the eurozone bailout of banks stricken by a housing bust and recession, retail investors are reckoned to hold some €30bn ($37bn) in subordinated debt and stock in Spain's small and medium-sized banks.Only a portion of that would be facing losses as banks able to comply with new capital requirements on their own or to pay back public money by June 2013 would escape the rule.This means investors at Santander, BBVA, Caixabank and Popular as well as other smaller sound banks would be safe as these lenders have already a core tier one capital ratio above the 9% required by European authorities. Furthermore, four nationalised banks - Bankia, NovaCaixaGalicia, CatalunyaCaixa and Banco de Valencia - are discussing formulas with the European Commission to minimise the cost to customers, many of them elderly, who were often sold these complex financial instruments as savings products."We're currently negotiating the amount of the hit. The Commission wants it rather high but we're confident we can obtain something lower," said a source at one of those banks."Several options are on the table. Convert the preference shares into bonds, into deposits, or into other instruments."Other banking sources said such options were being actively looked at and implemented with individual clients in some cases.Once the principle of a haircut has been agreed with Brussels, the government has the possibility to pay compensation for the losses.Last month, EU Competition Commissioner Joaquin Almunia said conditions on the aid for the banks forbade the use of European funds to compensate bondholders, so holders of preferential shares should accept losses at market value. But he stressed that national or local governments had the right to do so.Although using scarce public money to compensate investors might be unpopular, the first banking source said the option was still on on the table. "It's one thing to compensate for a loss and break competition rules, but it's quite another thing for the state to make a sovereign political choice," the banker said.Spain will require banks receiving state aid to enforce losses on hybrid capital and junior debt holders, according to a European Union document obtained by Reuters. It will modify existing legislation by end-August to allow these losses to be enforced, the draft Memorandum of Understanding said. Spanish banks have €65bn ($80bn) of subordinated debt outstanding, or €47bn excluding the country's two healthy big banks Banco Santander and BBVA, according to Barclays.Of this, retail investors hold 62% in instruments such as preferential shares that can pay a dividend, a much higher proportion than in countries like Ireland where junior bondholders were also forced to share losses in a bank bailout.The selling of preferential shares to retail investors, many of them elderly bank customers with little financial knowledge, has outraged Spaniards in a long-running scandal pre-dating the €100bn rescue package.Bankia, the nationalised bank likely to receive the largest share of European funds when they materialise later this year, has €3.1bn in preferential shares outstanding.The lender, which has asked for €19bn in rescue money, is in talks with the EU, the Bank of Spain and the stock market regulator to find a way to compensate investors, a spokesman for the bank said.Listed banks in the past have converted preferential shares into equity while non-listed savings banks have opted to swap them for term deposits. Barclays Capital suggested in a note on Wednesday that retail debt holders could be compensated by a national fund, but other experts said this would be difficult. Prime Minister Mariano Rajoy announced a package of new taxes and spending cuts on Wednesday aiming to slash €65bn more from the budget deficit by 2014. In this climate, public compensation for investors will be politically unsavoury.Bank clients stung by losses on preferential shares harangued the new chief executive of rescued lender Bankia at a shareholders' meeting last month."My wife and I had some money in a deposit and (the bank) took it out of the fixed deposit and put it in preferential shares, shamefully duping me with lies," said 85 year old retiree Miguel Garcia Tribaldo.New Bankia chief Jose Ignacio Goirigolzarri warned at the meeting that his options were limited in finding a solution for investors.The market price of these instruments varies from around 40% of face value to practically zero in some extreme cases, experts said. The central bank will discourage any bank in receipt of state aid from compensating junior bondholders with more than 10% of market price, the EU document said.NovaGalicia, a savings bank in northeastern Spain in line for state aid, has €960m of preferential shares held by retail clients, while CatalunyaCaixa has €480mBanco Valencia, the fourth bank almost certain to receive European funds, has €100m in subordinated debt held by retail investors but no preferential shares held by this kind of customer, a spokeswoman for the bank said. NovaGalicia is subject to a court probe into alleged misselling of these instruments to retail clients. El Pais daily cited a purchase form for €6,000 worth of shares signed by an 86-year-old woman's fingerprint.

Spanish miners hurl rocks at cops in protest

Coal miners threw rocks, bottles and firecrackers at riot police who fired rubber bullets in the Spanish capital on Wednesday as tens of thousands protested mining subsidy cuts.Clashes between young protesters and charging police resulted in 23 light injuries, including 12 demonstrators, six police, three onlookers and two journalists, emergency services officials said.A band of demonstrators rained down projectiles including firecrackers, glass bottles and rocks on riot police who protected themselves with their shields.Police could be seen chasing some of the protesters and firing rubber bullets into the air to disperse others."There was a police charge in front of the industry ministry," said a Madrid police spokesperson. Officers backed by dozens of police vans were seen deployed outside the building.Five people were arrested, police said.A few hundred metres way, another group of several dozen protesters outside Real Madrid's Bernabeu stadium were seen throwing stones and drinks cans at riot police.Police charged to try to detain one of them."Out, out," shouted protesters. "These are our weapons," they cried, raising their hands to the sky.Jeffrey Fernandez Sanchez, 27, a miner from Leon, said he saw the violence. "The police provoked them so there would be trouble," he charged.Hundreds of miners who had hiked more than 400km over two weeks from northern coal regions were joined by masses of workers from other sectors, the vast majority of whom were peaceful."Join all our struggles with the miners," read one banner hoisted in the crowd outside the Industry Ministry.Some of the miners at the rally had emerged the previous day from more than a week spent underground in the pits to protest the drastic cuts to state support on which the industry depends.Violent clashes had already broken out between miners and police in more than a month of protests in the northern mining towns over Madrid's decision to slash coal industry subsidies this year to €111m from €301m last year.Unions say the cuts will destroy coal mining, which relies on state aid to compete with cheaper imports, and threaten the jobs of around 8 000 coal miners and up to 30 000 other people indirectly employed by the sector.Carlos Marcos, 41, a miner from the town of Ponferrada in Leon who came on one of the hundreds of coaches that brought protesters into the Spanish capital, welcomed the broad support from other workers."It is impressive because the government never pays us any attention. The real cancer in this country is the politicians," Marcos said.Like other miners, he criticised Prime Minister Mariano Rajoy's conservative government for refusing to help miners more, even as it doles out rescue money to crisis-hit Bankia and other lenders."For the miners they can't find €200m but for Bankia there is €23bn," Marcos said.As the miners rallied, Rajoy announced to parliament a €65bn austerity package to rein in spiralling debt, including a rise in value added sales tax.Vicente Nunez, a 42-year-old steel worker, said he came from Asturias to demonstrate in support of the miners as he walked with a group in black shirts and the Asturias flag, which is light blue with a yellow cross."We work in the metal industry. It is all a chain, we all depend on each other," Nunez said."I have never seen a situation like this. We had crises in '92 and '98 but this time there is no future, no solutions. This schism in society is going to be bigger, more conflictual," he predicted.

NEWS,16.05.2012.

Judge to lead Greece in emergency Government

 

 Greece put a senior judge in charge of an emergency Government yesterday to lead it to new elections on June 17.In a sharp blow to confidence, sources at the European Central Bank it had halted liquidity operations with some Greek banks because their capital had been too far depleted.The move would mean those banks are no longer able to park assets at the ECB in return for cash, and would have to seek costlier emergency financing from the Bank of Greece.It was not clear which banks, or how many of them, were affected. One person familiar with the matter said the capital of four Greek banks was so depleted they were operating with negative equity capital.Greeks have been withdrawing hundreds of millions of euros (dollars) from banks in recent days as the prospect of the country being forced out of the European Union's common currency zone seems ever more real - although there has so far been no sign of a run on bank branches in Athens.European leaders who once denied vociferously that they were fretting over Greece leaving their currency union have given up pretence.Asked if he was concerned about a Greek exit, European Central Bank chief Mario Draghi said simply: "No comment".Political leaders failed to form a government following an inconclusive parliamentary election on May 6, leaving the state with its coffers almost empty and no elected cabinet in place to satisfy lenders it deserves the money needed to stay afloat.President Karolos Papoulias, whose powers as head of state are limited, named supreme administrative court head Panagiotis Pikrammenos as caretaker prime minister.He will have no power to take political decisions, only to carry Greece into the vote.The parliament that was elected on May 6 will convene today and be immediately dissolved, a presidency source said.The interim leader is little known. State television said he was born in 1945 and studied law in Athens and Paris. A court source said he would name as few ministers as possible."Thank you for your trust, and I believe that I am worthy of this mission," Pikrammenos said at a meeting with the president. "This is purely a caretaker government. However, it escapes no one that our country is going through difficult times."He repeated a joke he said he had read in the press, that his own name, which translates as "sorrowful" in English, made him suited to be the last prime minister of a political era.Leftists lead A new poll confirmed what other surveys have shown: that radical leftists who reject a bailout agreed with the EU and IMF are poised for victory, and the two establishment parties that agreed the rescue are sinking further after an historic wipeout 10 days ago.The leftists argue they can tear up the bailout and keep the euro, but European leaders say if Greece fails to meet promises to them, lenders will pull the plug on financing, driving Athens to bankruptcy and a swift exit from the EU single currency.On Monday, according to an official account, the president told party chiefs that figures from the central bank headed by George Provopoulos showed savers had withdrawn up to 800 million euros ($1 billion) from banks."Mr. Provopoulos told me there was no panic, but there was great fear that could develop into a panic," the president was quoted as saying in minutes of a meeting that failed to yield agreement on a cabinet."Withdrawals and outflows by 4 pm when I called him exceeded 600 million euros and reached 700 million euros," he said. "He expects total outflows of about 800 million euros, including conversions into German Bunds and other such things."Several banking sources told Reuters similar amounts had also been withdrawn on Tuesday. Nevertheless, there was no sign of panic or queues at bank branches in Athens on Wednesday. Bankers dismissed suggestions that a bank run was looming.A senior executive at a large Greek bank: "There is no bank run, no queues or panic. The situation is better than I expected. The amount of deposit withdrawals the president mentioned referred to three days, not one."Still, some were taking no risks. A 60-year-old textiles store owner who gave his name only as Nasos said he had transferred 10,000 euros over the phone to a bank in fellow eurozone state Cyprus on Tuesday afternoon."Any way you see it, things are difficult. If they call elections on June 17 - then everyone will take their money out on the Friday." That June 17 date was later confirmed.Charles Dallara, chief negotiator for the body representing private sector holders of Greek bonds, said there had been "a pickup in deposit flight from Greece".Dallara, who as head of the International Institute of Finance spent months negotiating the largest ever sovereign debt restructuring, said a Greek exit from the euro zone would be "somewhere between catastrophic and Armageddon" for Europe.

Merkel, Hollande promise joint growth strategy

 

 New French President Francois Hollande and German Chancellor Angela Merkel have acknowledged differences over how to boost growth in recession-plagued Europe, but pledged to forge a joint approach in time for an EU summit next month.The Socialist Hollande jetted to Berlin yesterday only hours after being sworn in to meet Merkel, a conservative, for the first time, arriving over an hour late after his plane was hit by lightning and he was forced to return briefly to Paris.The meeting was being closely watched for signs the leaders of Europe's biggest economies will be able to move beyond a war of words over how to resolve the debt crisis that now threatens to tear apart the 13-year-old currency bloc.Hollande sharply criticised Merkel during his election campaign for insisting on tough austerity to bring down suffocating debt levels across the euro zone. She in turn had backed Hollande's rival, conservative incumbent Nicolas Sarkozy.Supported by others in southern Europe, Hollande has vowed to shift the focus to growth and reopen a tough new set of budget rules that Merkel and other EU leaders agreed to adopt earlier this year - a step considered taboo in Berlin."I said it during my election campaign and I say it again now as president that I want to renegotiate what has been agreed to include a growth dimension," Hollande told a joint news conference with Merkel at the Chancellery in the German capital.Merkel's five-year double act with Sarkozy earned the duo the moniker "Merkozy" for their close cooperation during Europe's debt crisis. The new Franco-German couple - referred to by some as "Merkollande" - took care to play down their differences on Tuesday, hoping to send a signal of unity at a time when speculation is growing that Greece may have to exit the euro zone and return to the drachma."Growth has to feed through to the people. And that's why I'm happy that we'll discuss different ideas on how to achieve growth," Merkel said.They said the goal was to present joint proposals at a European Union summit in late June.Growth pact Instead of reopening Merkel's "fiscal compact", they are expected to complement it with a new "growth pact".Berlin has already signalled it is open to several ideas favoured by Hollande, including more flexible use of EU structural aid, a bigger role for the European Investment Bank and the introduction of "project bonds" to foster investments in infrastructure like transportation and energy networks.But most economists agree that these steps will make little difference to countries like Greece, which is in its fifth year of recession and has seen unemployment surge to 22 percent.That means Germany is likely to come under pressure to take additional steps, like giving struggling euro countries more time to reduce their deficits, a step it has so far resisted for fear of spooking jittery financial markets.Although the reserved Merkel learned over time to work with the impulsive Sarkozy, her advisers often complained about his erratic behaviour and some believe she will ultimately form a closer bond with the more outwardly cautious Hollande.The two were born less than a month apart, grew up in religious households and both scorn the flashy styles of their more charismatic predecessors, Sarkozy and Gerhard Schroeder.Hollande noted that French and German leaders of different political stripes had a long history of working well together to promote the common European project, referring to Schroeder and Jacques Chirac, as well as to Helmut Kohl and Francois Mitterrand, and Helmut Schmidt and Valery Giscard d'Estaing.After the news conference, the two leaders dined on lamb schnitzel and asparagus on the eighth floor of the Chancellery, overlooking the Tiergarten park and the Reichstag parliament building. Aides said they had a broad conversation on topics ranging from economic and foreign policy to bilateral issues.Hollande later flew back to Paris. He is due in Washington later in the week to meet US President Barack Obama ahead of G8 and NATO summits at Camp David and Chicago.Hollande finds himself in the hot seat from day one. Earlier on Tuesday, Greece abandoned a nine-day hunt for a government and called a new election that could hand victory next month to leftists opposed to the terms of the country's EU/IMF bailout.A growing number of policymakers in Europe have warned over the past week that if Greece does not stick to the budget cuts and structural reforms agreed with its international lenders, it may have no future in the currency bloc.Both Merkel and Hollande said they wanted Athens to remain a part of the euro project and stood ready to explore ways to support the Greek economy so it could return to growth: "Like Mrs. Merkel, I want Greece to remain in the euro zone," Hollande said.