NEWS,28.07.2012

Olympics open with pageant for next generation

Queen Elizabeth declared the London Olympics open after playing a cameo role in a dizzying ceremony designed to highlight the grandeur and eccentricities of the nation that invented modern sport.Children's voices intertwining from the four corners of her United Kingdom ushered in an exuberant historical pageant of meadows, smokestacks and digital wizardry before an audience of 60,000 in the Olympic Stadium and a probable billion television viewers around the globe.Many of them gasped at the sight of the 86-year-old queen, marking her Diamond Jubilee this year, putting aside royal reserve in a video where she stepped onto a helicopter with James Bond actor Daniel Craig to be carried aloft from Buckingham Palace.A film clip showed doubles of her and Bond skydiving towards the stadium and, moments later, she made her entrance in person."In a sense, the Olympic Games are coming home tonight," IOC President Jacques Rogge told the crowd."This great, sports-loving country is widely recognised as the birthplace of modern sport."To underline the point, Bradley Wiggins, crowned five days earlier as Britain's first winner of the Tour de France and hoping to add more road cycling gold in London, tolled the world's largest tuned bell to begin the ceremony.In one moment of simple drama, the stadium fell silent as five giant, incandescent Olympic rings, symbolically forged from British steel mills, were lifted serenely out of the stadium by weather balloons, destined for the stratosphere.And at the climax of an evening that had children centre-stage, seven teenage athletes were given the honour of lighting the Olympic cauldron that will burn for the duration of the Games, in keeping with the theme of "Inspire a Generation".More than 10,000 athletes from 204 countries will compete in 26 sports over 17 days of competition in the only city to have staged the modern Games three times.Most of them were there for the traditional alphabetical parade of the national teams, not least the athletes from Egypt, Tunisia, Libya and Yemen competing in their first Olympics since their peoples overthrew autocrats in Arab Spring revolutions.Brunei and Qatar were led in by their countries' first ever female Olympians and so, along with Saudi Arabia, ended their status as the only countries to exclude women from their teams.At a reception, the queen spelled out the role played by her family after the Olympics were revived in Athens in 1896."This will be the third London Olympiad. My great grandfather opened the 1908 Games at White City. My father opened the 1948 Games at Wembley Stadium. And, later this evening, I will take pleasure in declaring open the 2012 London Olympic Games at Stratford in the east of London," she said."Over recent months, many in these islands have watched with growing excitement the journey of the Olympic torch around the United Kingdom. As the torch has passed through villages and towns, it has drawn people together as families and communities."To me, this spirit of togetherness is a most important part of the Olympic ideal. And the British people can be proud of the part they have played in keeping the spirit alive."The opening show, costing an estimated 27 million pounds, was inspired by William Shakespeare's play The Tempest, his late-life meditation on age and mortality.But it was children who set the tone, starting from the moment when live pictures of junior choirs singing in the landscapes of England, Scotland, Wales and Northern Ireland were beamed into the stadium's giant screens, four traditional songs woven together into a musical tapestry of Britain.Oscar-winning film director Danny Boyle began his sweep through British history by grassing over the arena in a depiction of the pastoral idyll mythologised by the romantic poet William Blake as "England's green and pleasant land".Idyll turned swiftly to inferno as the Industrial Revolution's "dark Satanic mills" burst from the ground, before those same mills forged the last of five giant Olympic rings that rose into the sky.At the end of a three-hour extravaganza, David Beckham, the English soccer icon who had helped convince the IOC to grant London the Games, stepped off a speedboat carrying the Olympic flame at the end of a torch relay that inspired many ordinary people around Britain.Past Olympic heroes including Muhammad Ali, who lit the cauldron at the 1996 Atlanta Games, and British rower Steve Redgrave, the only person to win gold at five successive games, welcomed the flame into the stadium.Yet it was not a celebrity but seven teenage athletes who lit a spectacular arrangement of over 200 copper 'petals' representing the participating countries, which rose up in the centre of the stadium to converge into a single cauldron.Moments later, a balloon-borne camera relayed live pictures of the earlier-released interlocked rings gliding through the stratosphere against the curved horizon of the planet below.The performance included surreal and often witty references to British achievements, especially in social reform and the arts, and ended with former Beatle Paul McCartney singing Hey Jude.Many sequences turned the entire stadium into a vast video screen made up of tens of thousands of "pixels" attached to the seats. One giant message, unveiled by Tim Berners-Lee, British inventor of the world wide web, read "This is for Everyone".Until the last few days, media coverage had been dominated by the security firm G4S's admission that it could not provide enough guards for Olympic venues. Thousands of extra soldiers had to be deployed at the last minute, despite the company's multi-million-dollar contract from the government.Suicide attacks that killed 52 people in London in July 2005, the day after it was awarded the Games, ensured that security would remain a worry. And this year the Games mark the 40th anniversary of the 1972 Munich massacre, when 11 Israeli Olympic team members were killed by Palestinian militants.Although no medals will be awarded until Saturday, the women's soccer tournament started on Wednesday, and on Friday South Korean archers set the first world records of the Games.Im Dong-hyun, who suffers from severe myopia and just aims at "a blob of yellow colour", broke his own 72-arrow world record with a score of 699 out of a possible 720, leading his two colleagues to a record combined score as well.The Games' first medals will be decided in the women's 10 metres air rifle final on Saturday, with the big action coming in the men's cycling road race, where world champion Mark Cavendish is favourite to become Britain's first gold medallist.In the evening, Americans Michael Phelps and Ryan Lochte are scheduled to line up for a classic confrontation in the men's 400 metres individual medley final.Phelps, competing in seven events after winning a record eight gold medals four years ago in Beijing, is bidding to become the first swimmer to win gold in the same discipline three times in a row."This is going to be a special race," said Gregg Troy, head coach of the American men's team. "I can't imagine a better way to promote our sport than a race like this on the first day."

 

Iran expands oil tanker insurance

Iran is expanding its insurance on its fleet of 47 oil tankers through a multi-billion-dollar line of credit as it seeks to get around EU sanctions crimping its crude exports, reports said on Saturday."Iran is ready to give total insurance for the transport of its oil... and the commitments by Iranian insurers are no different from those by Western insurers and therefore all risks and dangers are insured," Iran's Opec representative, Mohammad Ali Khatibi, was quoted as saying by the state-run newspaper Iran.The Fars news agency cited an "informed source" it did not identify as saying that the government had given the central state insurance agency, Bimeh Markazi, a line of credit worth several billion dollars to insure the tankers. It said 10% of the money had already been transferred.The measure, apparently aimed at any buyer of Iranian crude worldwide, expands on a promise of insurance for deliveries of its oil using Iranian tankers to major customers China and India. South Korea is also mulling joining the offer.Iran is suffering a cut in oil sales abroad of up to 40%, according to the International Energy Agency (IEA), because of an EU embargo on Iranian crude imports and a related ban on European insurers providing cover for deliveries of Iranian oil anywhere in the world.European insurers accounted for 90% of coverage for Iran before the EU sanctions took effect on 1 July.Iran, which is striving to maintain a semblance of business as usual over its oil exports, is attempting to fill the insurance gap itself, but it faces several obstacles.US sanctions targeting Iranian financial transactions make it unclear how Iran could pay out any claims arising from accidents involving its tankers.Oil tankers are typically insured for up to $1bn because of the risk of oil spills.A European analyst in Tehran noted that the 40 tankers in Iran's fleet owned by the NITC, formerly known as the National Iranian Tanker Company, each had a long-distance capacity of up to two million barrels of oil.Iran, before the EU sanctions, exported around 2.5 million barrels of oil per day. The IEA estimates that has now been cut to around 1.5 million barrels per day.Several of the NITC vessels were being used in June to store Iranian offshore crude that Tehran has not been able to sell because of the sanctions, according to industry specialists.Iran has announced plans to quickly expand its onshore storage capacity, which has been saturated, including by subcontracting to private firms. Tehran has also ordered 12 new supertankers from China and should receive the first in December.

Pass tax proposal - Obama urges

US President Barack Obama urged Republicans in the House of Representatives on Saturday to pass his proposal calling for extending tax cuts for everybody but the richest Americans."Now it comes down to this," Obama said in his weekly radio and Internet address. "If 218 Members of the House vote the right way, 98% of American families and 97% of small business owners will have the certainty of knowing that their income taxes will not go up next year."On 1 January, a tax cut adopted under former president George W Bush and extended under Obama is set to expire. But Democrats and Republicans strongly disagree over how to extend it.While Obama favours higher taxes for the rich, Republicans argue it would undercut the nation's fragile economic recovery.This past week, the Democratic-controlled Senate passed a tax cut extension for American families earning less than $250 000 a year, but Republicans in the House are staunchly opposed to this bill, arguing that all Americans, including the wealthy ones, should benefit from the extension.The president noted that he fundamentally disagreed with those who believed that the best way to create prosperity in America was to let it trickle down from the top."I know they're wrong because we already tried it that way for most of the last decade. It didn't work," Obama said."We're still paying for trillions of dollars in tax cuts that benefited the wealthiest Americans more than anyone else; tax cuts that didn't lead to the middle class jobs or higher wages we were promised and that helped take us from record surpluses to record deficits."The president said the country could not afford more of top-down economics. He said America needed policies that would grow and strengthen the middle class, help create jobs and make education and training more affordable.

NEWS,19.06.2012

Growth the watchword at G20 summit

 

The leaders of the world's major economies embarked on the final day of the G20 summit Tuesday determined to kickstart growth and pull the eurozone back from the brink of disaster.European members were under extraordinary pressure from their international counterparts to loosen the straitjacket of their austerity programs and to allow the European Central Bank to open the lending floodgates.Beyond the summit conference center in the Mexican resort of Los Cabos, bond markets jacked up rates on Spanish and Italian debt amid self-fulfilling fears that the debt crisis that sank Greece was spreading once again.Germany's Angela Merkel remains the driving force behind the eurozone's austere determination to privilege deficit busting over stimulus spending, although US officials say her position is softening."Discussion here has been balanced: we need the right mix of consolidation and growth stimulus at the same time," Merkel told reporters on Tuesday, saying the previous night's showpiece dinner had been a "very frank and honest exchange."A draft version of the G20 final statement, which was to be finalized and published by the leaders on Tuesday, suggested that a formulation would be found that would commit the leaders to a pro-growth agenda."All G20 members will take the necessary actions to strengthen global growth and restore confidence," it said, vowing that eurozone members would safeguard the stability of the single currency in the face of volatile markets.The version seen by AFP allowed no hint that Merkel or her allies might crumble and allow the ECB to pump out cash or to pool German debt with that of the weaker eurozone members in order to create low-interest eurobonds.But it opened up the possibility of more lending and spending if the European economy continues to struggle."Should economic conditions deteriorate significantly further, those countries with sufficient fiscal space stand ready to coordinate and implement discretionary fiscal actions to support domestic demand," the draft reads.There was also an indication that Merkel was coming round to the idea of a more integrated EU banking system that would allow joint supervision and a unified system to pay back depositors in any failing institutions."We support the intention to consider concrete steps towards a more integrated financial architecture, encompassing banking supervision, resolution and recapitalization, and deposit insurance," the draft statement said."Markets expect that we work together more closely," Merkel told reporters on Tuesday morning, without specifically mentioning unifying the banking system.EU Commission chairman Jose Manuel Barroso bristled at hostile questioning over why his rich continent needed so much support from abroad, declaring: "We are certainly not coming here to receive lessons from nobody."US President Barack Obama cancelled a planned meeting with European G20 members after the official dinner hosted by Mexico's President Felipe Calderon ran long."Everything that could have been said at the Obama meeting had been said at dinner, so we were done with the topic," Merkel said.Obama called for Greece to be given more time to get its affairs in order, after parties committed to honoring the terms of its bailout agreement won a majority of seats in Sunday's parliamentary election.But Merkel -- fast becoming a hate figure among Greeks -- remained unmoved. "Elections cannot call into question the commitments Greece made. We cannot compromise on the reform steps we agreed on," she told reporters on Monday.Progress was made in Los Cabos in boosting the resources available to the International Monetary Fund to help protect vulnerable countries from the backwash of the eurozone crisis.IMF chief Christine Lagarde thanked emerging powers, led by China, for pledging enough to bring her pool for emergency loans up to $456 billion (361 billion euros) in exchange for a greater say in Fund affairs.In addition to summit sessions, the leaders were to hold a series of side meetings on Tuesday, notably a two-way between Obama and Chinese President Hu Jintao, and a possible reschedule of the cancelled US-EU talks.The summit was due to draw to a close with a ceremony at 2330 GMT, after which Calderon was to address the press.Next year's G20 summit will be held September 5-6 in Saint Petersburg, Russia.

 

Greek leaders poised for coalition deal

 

Greece's conservatives expect to be able to form a coalition Government with the Socialists today, allowing the two parties that dominated politics for decades to share power despite a major anti-establishment election vote.Conservative New Democracy leader Antonis Samaras has promised to negotiate less punishing terms for Greece's international bailout, after only narrowly beating a radical left-wing party that campaigned to scrap the austerity deal entirely.A senior New Democracy official expected agreement soon on a new cabinet with the PASOK Socialists and possibly another smaller centre-left party following Sunday's election, the second in as many months.Speaking late last night, he said a deal would be reached today that would involve more than a symbolic involvement by PASOK in the Government."They will participate actively," said the official, who declined to be identified.New Democracy and PASOK alternated in power from the fall of military rule in 1974 until last year, when Greece's economic crisis forced the arch rivals to share power in a pro-bailout national unity Government."Political leaders should be aware of the fact that this Government is Greece's last chance to remain in the eurozone," the centre-left daily Ta Nea said in an editorial."The Greek people are ready to reward the parties that manage to ease austerity and punish those that raise voices of dissent," it said.The comment underscored the widespread expectation in Greece that a new Government will be able to negotiate an easing in the tough conditions of the European Union and International Monetary Fund bailout despite resistance from Germany.Many Greeks hold both parties responsible for the nation's near bankruptcy, which forced it to take bailouts from the EU and IMF in 2010 and again this year.New Democracy narrowly won the election, averting the immediate risk of a Greek euro zone exit but raising doubts on whether the new Government can impose austerity cuts on a nation deeply divided over the price for bailout funds.After claiming victory over the radical leftist SYRIZA party to jubilant crowds, Samaras began yesterday the more sobering task of talking to rivals to cobble together a coalition.The greatly weakened PASOK, which finished third in Sunday's vote, has yet to commit to supporting Samaras, but its leader Evangelos Venizelos said talks must be wrapped up by today - signalling a deal would be agreed by then.The smaller, moderate Democratic Left party, which opposed the bailout backed by the conservatives and the Socialists, has also suggested it will offer conditional support to a Government led by Samaras.Venizelos was due to meet the head of Democratic Left, Fotis Kouvelis in the morning to gauge support for a three-way alliance with their traditional conservative rivals.With Greece just weeks away from running out of cash and a new government needed to negotiate the next instalment of funds from lenders, Greek political leaders appeared determined to avert the deadlock that followed an inconclusive vote on May 6."I am optimistic that this time they will agree to form a Government," a Greek banker who declined to be named told Reuters."They have realised that there is no margin of error or further delays. A third election would be a disaster."With New Democracy taking a 50-seat bonus under Greek electoral law for coming first, a New Democracy-PASOK alliance would have 162 seats, a majority in the 300-seat parliament.Adding the Democratic Left would give it 179 seats.Nation in crisis A difficult road lies ahead for Samaras, a US-educated economist who went to college with former Socialist Prime Minister George Papandreou.He inherits a nation in deep social and economic crisis, with an economy in its fifth year of a recession that has left one in five workers out of a job.A rising number of businesses are closing down, the number of homeless on the streets is growing and anger at austerity cuts is at boiling point.Samaras promised Greeks and prospective partners that he would water down the painful terms of the EU/IMF bailout."We will simultaneously have to make some necessary amendments to the bailout agreement in order to relieve the people of crippling unemployment and huge hardships," he said.Samaras campaigned on promises to cut taxes as well as raising unemployment benefits and pensions.The New Democracy official said the new Government would aim to accelerate and broaden a privatisation programme to top up state coffers, but also ask its creditors to spread 11.7 billion euros of further austerity cuts over four years instead of two.But any attempt to veer off the prescribed austerity path would not sit well with European partners already irritated by what they see as the slow pace of Greek reform.Germany, Europe's paymaster, has ruled out more than minor delays to some targets in the 130-billion-euro rescue package.Chancellor Angela Merkel said at a meeting of G20 leaders in Mexico that any loosening of Greece's agreed reform promises would be unacceptable and reiterated that Athens had to stick to its commitments.With an emboldened SYRIZA bloc led by former communist student leader Tsipras at the head of a powerful opposition, the new government could face protests soon after taking office.SYRIZA almost doubled its share of the vote since the previous election on May 6.

NEWS,20.04.2012.

A five-point checklist to help you prepare for another global crisis

The IMF just downgraded growth in Europe and projects a recession of -0.3 per cent in 2012. Imagine you are minister for finance in an average developing country. You survived the 2008-2009 global crisis, presided over more than five years of respectable economic growth, a boom in commodity prices fills your treasury with cash, and your central bank does not quite know how to keep your currency from appreciating. Old problems persist — too many young people are unemployed, your industrial sector is small and aging, and plenty of public money is wasted or simply missing. But, all in all, you feel pretty good about how things are going under your watch. Suddenly, you learn that a new global crisis may be looming on the horizon. Think of another rich country defaulting on its debt, pulling other rich countries’ banks into trouble. East Asia can no longer find avid consumers in the West for its exports, so it cuts back on its own consumption of raw materials. Commodity prices begin to fall, and your politicians start to worry aloud. What do you do then? Or better, what can you do now to prepare for all that? Five key measures may help. First, secure your financing — for at least the next 24 months. The last thing you want in the middle of a storm in international finance is to default on your payments. If you do, already-nervous investors — foreign and local — will rush for the door. Not to speak of what soldiers, teachers and civil servants would do if they were unpaid. So, calculate your cash needs as if all your expenditures were untouchable, and sign today the loans you know you will need tomorrow. (With interest rates currently at rock-bottom, this is smart debt management anyway.) While you are at it, assume that a good 10 per cent of those grants that developed nations regularly give you will no longer come in. It would also be nice if public companies that manage your oil, gas or minerals could buy insurance against their prices falling too much (this is called “hedging” in financial jargon); unfortunately, if they have not done it before, it is probably too late now. Second, prioritise your investments. Decide now which project you will slow down, postpone or drop, if you were to run out of money. In a way, you are looking for projects that are not “shovel ready”, that is, those that cannot be quickly implemented. Rule of thumb: if it involves massive, never-done-before, pride-of-the-nation construction, it probably can be put on hold. Remember, cutting investment expenditures is always tricky — the interest of the politically-connected are usually affected. You don’t want to have that discussion during a crisis. Third, audit your social safety nets. There will be plenty of people in need as jobs disappear and incomes fall. Poor families will respond in ways that may hurt them, and your country, in the long run — pulling teenagers from high school is the typical example. You will then be called upon to fund temporary employment programmes, feed children in schools, and pay for direct cash transfers. Fourth, stress test your banks. Your financial system is probably small and isolated from the sub-prime sophistication of Wall Street. It is made up mostly of banks that hold the deposits of the urban middle class and handle the remittances of the Diaspora. What would happen to your banks if, all of a sudden, foreign currency became expensive and scarce? Are their loans concentrated on a few construction or trading companies that would go belly up if the commodity boom came to an end? And are banks lending to each other? To each others’ owners? Your central bank should be able to answer all these questions — it is supposed to supervise banks in real time. So it can alert you early. And, fifth, identify who will suffer when crisis strikes. Who are the winners and losers? (Yes, there are winners in this.) Will the impact be felt in a single, remote rural area where your commodities are produced or extracted, or will it be primarily an industrial affair, hurting middle classes across cities? Will the affected belong to a specific racial, religious or regional group? Whose consumption will get more expensive? And whose assets will lose most value? This kind of “political economy analysis” is invaluable because it will highlight the roadblocks in your decision-making. One final point that may not depend entirely on you as finance minister. It would help to decide who, when the time comes, will speak for the government and what the message will be. Typically, in days of turbulence, cabinets tend to become dissonant and perceptions of policy paralysis — if not incompetence — make things worse. That would be a pity. All told, it is possible — and not too difficult — to get ready, at least for the first wave of impacts from a potential new global crisis. And if the crisis never comes, so much the better.