NEWS, 29.05.2012.

Greek Socialist leader slams IMF chief’s tax comments

 Greece's socialist leader Evangelos Venizelos accused the IMF chief Christine Lagarde on Sunday of trying to humiliate the country. His comments come after Lagarde had urged Greece to "help themselves" by "paying their taxes". 

Greece's Socialist party leader accused IMF chief Christine Lagarde of trying to "humiliate" the crisis-hit country by saying Greeks dodge taxes as he campaigned Sunday for crucial June elections."Nobody can humiliate the Greek people during the crisis, and I say this today addressing specifically Ms. Lagarde... who with her stance insulted the Greek people," Evangelos Venizelos told an election rally.Lagarde told Britain's Guardian newspaper in an interview published Friday that Greeks must "help themselves collectively" by all paying their taxes, saying she was more concerned about sub-Saharan Africans in poverty than Greeks hit by the economic crisis.Her comments came as Venizelos's Pasok and other Greek parties squared off for a June 17 election that could determine whether it continues to receive IMF funds and stays in the eurozone.Lagarde's remarks drew thousands of comments on her Facebook page, many from annoyed Greeks.On Saturday the IMF chief responded: "I am very sympathetic to the Greek people and the challenges they are facing. That's why the IMF is supporting Greece in its endeavour to overcome the current crisis.""An important part of this effort is that everyone should carry their fair share of the burden, especially the most privileged and especially in terms of paying their taxes."Venizelos told a news conference on Sunday, the morning after his campaign rally: "Ms. Lagarde had to revise her comments. I am glad she did it because that means she takes into account a proud nation."Greece made a deal in 2010 to receive hundreds of billions of euros (dollars) from the IMF and the EFSF, a European Union bailout fund, to rescue it from financial collapse.The country will head to the polls for a second time in six weeks on June 17 since political parties failed to form a coalition after an inconclusive election on May 6.In that election, voters fed up with salary and pension cuts demanded by the bailout terms handed second place to radical left-wing party Syriza, which has threatened to renege on the bailout accords.Former prime minister Lucas Papademos warned on May 11 that Greece may run out of money by the end of June if international bailout funds are cut off following the election, To Vima newspaper reported Sunday.That could lead Greece to default on its debt and leave the eurozone."From late June onwards, the ability of the government to fund its obligations fully depends on the approval of the subsequent instalments of loans from the EFSF and the IMF," To Vima quoted Papademos as saying in a leaked memo."The available funds in the Greek government will be reduced gradually from about 3.8 billion euros on May 11 to about 700 million euros on June 18 and from June 20 will enter negative territory at the level of around one billion euros."Ahead of the June 17 election, Syriza has led at times in the opinion polls, but a series of polls published Sunday indicated conservative party New Democracy had taken the lead.Campaigning on Saturday, New Democracy leader Antonis Samaras said a victory for Syriza would cause "catastrophe" and drag Greece out of the euro.The new surveys by five separate polling groups forecast a New Democracy victory ranging between 23.3 percent and 25.8 percent, a result that would still require the party to join up with allies to form a viable government.Syriza polled in second place ahead of Pasok, which like New Democracy defends the bailout agreement while proposing to amend it.Venizelos said he wants to extend the loan repayments."The country needs a government that will unite the people and revise the loan agreement, but assure we stay in the euro," he said Sunday.One survey by pollster Marc, carried out on 1,075 households on May 22-24, showed that 82.4 percent of Greeks wished to stay in the eurozone.

IMF chief tells Greeks to ‘pay their taxes’

 IMF chief Christine Lagarde told Greeks on Friday to pay their dues and help drag their country out the crippling economic crisis. Lagarde said Greeks could "help themselves" by "all paying their taxes". 

The head of the International Monetary Fund on Friday urged Greeks to pay their taxes, saying she is more concerned about sub-Saharan Africans in poverty than Greeks hit by the economic crisis.Christine Lagarde told the Guardian newspaper in an interview published online Friday, "As far as Athens is concerned, I also think about all those people who are trying to escape tax all the time. All these people in Greece who are trying to escape tax."The IMF managing director said Greeks should "help themselves collectively" by "all paying their tax", adding that she thought "equally" about those deprived of public services by the crisis and those involved in tax avoidance.Caught in a fifth straight year of recession, Greece is struggling to apply a tough austerity overhaul in return for EU-IMF loans, but has already made drastic cuts to public services.On children affected by the cuts, Lagarde said their parents needed to take responsibility."Parents have to pay their tax," she was quoted as saying."I think more of the little kids from a school in a little village in Niger who get teaching two hours a day, sharing one chair for three of them, and who are very keen to get an education," she added."I have them in my mind all the time. Because I think they need even more help than the people in Athens."Asked whether it was "payback time" for Greece and other debt-ridden eurozone economies, she responded, "That's right", the newspaper said.Greece in 2010 committed itself to a reform programme in return for hundreds of billions of euros (dollars) in bailout funds from the EU and the International Monetary Fund to prevent a default.Many of the reforms are currently in limbo, however, as Greece awaits a new general election on June 17 after an inconclusive vote on May 6.The IMF, along with European leaders, has said it will not bend on tough conditions attached to its loans to Greece, with fears rising that the debt crisis could culminate in a Greek exit from the eurozone.

NEWS, 28.05.2012.

Greek Exit Fears Cause Wealthy Greeks To Transfer Money To Safer Northern Banks

 

After Greece's inconclusive elections on May 6 led to political deadlock and heightened doubts about the country's future in the euro zone, Nikos, a successful businessman in the pharmaceutical supply industry, sent 7 million euros to a bank in Luxembourg."I have worked hard all my life and took risks in business. I am 62 years old now and cannot risk my money becoming drachmas. Most Greeks want to stay in the euro, that's what polls show, but it's better to be safe than sorry," he said.His precaution reflects a trend among southern Europe's wealthy. Greeks fear devaluation while Spaniards and Portuguese fret about the health of their banks so they are sending money to banks in the stronger economies of northern Europe.Nikos sent his cash to a Swiss bank offering much lower interest rates than his Greek bank paid but he said the sacrifice is worth it for peace of mind.Financial advisers and private bankers whose clients have accounts too large to be covered by a Europe-wide guarantee on deposits up to 100,000 euros, are reporting a "bank run by wire transfer" that has picked up during May.Much of this money has headed north to banks in London, Frankfurt and Geneva, financial advisers say."It's been an ongoing process but it certainly picked up pace a couple of weeks ago We believe there is a continuous 2-3 year bank run by wire transfer," said Lorne Baring, managing director at B Capital, a Geneva-based pan European wealth management firm."Where there is liquidity it is moving to the safest part of Europe and the perceived safest part of Europe is in the North... It's a no brainer," he said.Another private banker specialising in Spanish clients at a global banking group said Spain's wealthy remembered Argentina's 'corralito' a decade ago when authorities restricted withdrawals to prevent bank runs."We are taking calls from new clients who want part of their money outside of Spain because of the potential risk of a corralito though we don't think that will happen and we don't incentivise our clients to do that," the banker said.As deposits in European banks are guaranteed up to 100,000 euros, all but the wealthiest savers would get their money back in the event of a bank failure.But if a country left the euro, as economists think could happen to Greece, bank accounts would be redenominated into a new currency that could then devalue, eroding the value of deposits.Depositors could also face controls to prevent capital flight and further devaluation, or a freeze on withdrawals to defend the banks.One senior private banker based in London said colleagues had taken calls from Greeks "very keen" to open accounts in the UK to protect their wealth if Greece leaves the euro and returns to its old currency, the drachma.However, there is much legal uncertainty surrounding a potential exit from the euro zone and lawyers say moving money abroad may not necessarily protect it from conversion into the new currency."It is clear that Greek investors are looking to find ways to hold euros that will not get converted into drachmas," said Damian Bloom, partner at law firm Berwin Leighton Paisner."There is a concern whether euro deposits held by a Greek person in a non-Greek account would also get converted, or indeed whether Greek issued euro notes held by non-Greek persons would be converted. I don't know if these practical issues have yet been resolved."

Britain's Blair faces grilling over ties to Murdoch

 

Tony Blair's decision to openly court Rupert Murdoch to win power and ensure favourable coverage during his decade-long tenure as British prime minister will come under scrutiny when he faces a media inquiry today.The inquiry, ordered by Prime Minister David Cameron after Murdoch's now defunct News of the World tabloid admitted hacking phones, has tarnished Britain's elite by laying bare the collusion between politicians, the police and the media.Blair kicks off an important week at the Leveson inquiry by answering questions about his often obsessive media management which included courting Murdoch.The inquiry has so far focused on the conduct of the media and the close ties between Murdoch's empire and serving ministers, helping the opposition Labour Party leader Ed Miliband consolidate his position with attacks on Cameron.But the grilling of Blair, who recast the relationship between the media and politicians by 'spinning' news to gain the most favourable coverage, could undermine Miliband's attempt to portray Labour as a party above courting media tycoons.While Blair is no longer active in British politics, the inquiry may still prove uncomfortable as it examines issues such as his decision after stepping down as prime minister to become a godfather to Murdoch's daughter Grace at a ceremony on the banks of the river Jordan."Blair led the way in having no shame about courting Murdoch," said Ivor Gaber, professor of political journalism at City university."He set the style and the standard and if you regard Cameron as the 'heir to Blair' then it's not exactly surprising that he followed suit."Murdoch told the inquiry last month that he had never asked a prime minister for anything.Blair set the tone for his relationship with Britain's press when he flew to Australia in 1995 to speak before a gathering of Murdoch's executives who had previously used their British tabloids to vilify his Labour Party predecessors.The decision infuriated much of his left-of-centre party who saw the Australian-born tycoon as a right-winger who had helped to keep them out of power for years."People would be horrified," Blair said later in his autobiography. "On the other hand ... not to go was to say carry on and do your worst, and we knew their worst was very bad indeed.""The country's most powerful newspaper proprietor, whose publications have hitherto been rancorous in their opposition to the Labour party, invites us into the lion's den. You go, don't you?"The speech received a standing ovation and Murdoch indicated for the first time that he could be willing to switch the allegiance of his newspapers to the Labour Party."If our flirtation is ever consummated Tony then I suspect we will end up making love like porcupines, very, very carefully," he told him.With the backing of Murdoch's top-selling Sun tabloid, Blair swept to power in 1997 and again in 2001 and 2005. But with an ever increasing reputation for public relations 'spin', he started to face questions over his sincerity."Tony Blair quickly became famous in Fleet Street for inviting in one group of newspaper people and telling them how sceptical he was about Europe; and then inviting in another lot and telling them how keen he was on Europe," Andrew Marr, a senior BBC journalist, told the inquiry."But the different groups compared notes, and his reputation was not hugely enhanced."Much of that came to a head when Blair and then US President George W. Bush agreed to invade Iraq, going against the public opinion in Britain.Blair is likely to be asked why he spoke to Murdoch three times in the days leading up to the Iraq war and whether this had any impact on the fact that all Murdoch's papers supported the unpopular invasion.He will also be asked whether his reliance on Britain's press meant that he did not properly scrutinise their role in society and whether any group, such as Murdoch's News International, had too much control of the market."There was a desperation to get the Sun onside and to get News International on side, basically at all costs," Liverpool University's political professor Jonathan Tonge, told Reuters."And if that meant sacrificing a serious analysis of the relationship and the health of the relationship, then so be it."

NEWS,15.3.2012

China removes top leadership contender Bo from post

 

 

Ambitious Chinese Communist Party leadership contender Bo Xilai has been toppled from his post as head of the inland city of Chongqing, in a move risking a backlash from backers of his controversial vision of socialist growth. His abrupt downfall, announced on Thursday by the official Xinhua news agency, exposes ideological divisions as a new generation prepares to take power in China later this year, and may stir tensions between supporters of his more traditional, state-dominated version of socialism, and liberal critics, who saw him as a dangerous opportunist. Bo was removed as party boss of Chongqing, a sprawling region in the southwest that he turned into a bastion of Communist revolutionary-inspired "red" culture and egalitarian growth, a day after being rebuked by Premier Wen Jiabao in a news conference broadcast live across the country. The telegenic Bo had been a contender for top leadership, but his prospects suffered a blow after Vice Mayor Wang Lijun, previously his long time police chief, went to ground in February in the U.S. consulate in nearby Chengdu until he was coaxed out and placed under investigation.Xinhua said Vice Premier Zhang Dejiang will replace Bo, but gave no further details. It also said Wang had been removed from his vice mayor post. When announcing Bo's dismissing, the head of the party's powerful organisational department, Li Yuanchao, said the move was made "in light of the serious political repercussions of the Wang Lijun incident," according to Chinese news reports that cited a Chongqing television report. Vice Mayor Wang had earlier been a key figure in a drive against organised crime that garnered Bo nationwide attention. While Bo might be kept on in some role until the Communist Party leadership succession this autumn, his hopes for promotion to a top job were finished, said Chen Ziming, an independent scholar in Beijing who follows party politics.” Now it looks like Wen Jiabao's comments yesterday represented the leadership's collective view that Bo needed to go," said Chen, referring to the premier's pointed rebuke of Bo."This will affect the leadership politics for the 18th Congress, because this opens up new uncertainties about who is in contention," said Chen.The 18th Party Congress late this year will see China's biggest leadership transition in nearly a decade, with Party Chief Hu Jintao and other elders due to retire and hand power to a younger generation headed by Vice President Xi Jinping.Unlike Bo, Xi has shied away from the limelight. Both are "princelings", the term for children of current, retired or late revolutionary leaders."The fact that the Xinhua announcement did not stress that Bo will be placed in another post means that he's probably going to be put under investigation, and there won't be any conclusion on his future until the end of that," said one source, a journalist with extensive contacts among central and Chongqing officials. He spoke on condition of anonymity to protect himself and his contacts.Bo's fall from a confident defence of his policies at a news conference last week to dismissal this week has come while central authorities push forward with an investigation into Wang's flight to the U.S. mission.Bo has plenty of fans, attracted to the idea of a "Chongqing model" of development that promises greater equality. Some were riled by his sudden departure."The removal of Bo Xilai is a real shock to me. We don't know whether it's because of his personal errors or is an attack on the Chongqing model," said Sima Nan, a leftist writer and broadcaster in Beijing who has praised Bo."If this amounts to a negation of the Chongqing model, then I can't agree with this decision."Wen added to the cloud hanging over Bo on Wednesday by scolding Chongqing for the scandal and obliquely warning against nostalgia for the Mao Zedong era."Well, the good news, I guess, is that the risks of leftism and extremism in Chinese politics have just taken a nose dive," said David Zweig, a scholar of Chinese politics at the Hong Kong University of Science and Technology."I guess nobody really knew what he believed in, except self-promotion, and now the self-promotion has done him in, which is good," said Zweig.Bo's removal quickly became one of the most talked about topics on China's Twitter-like microblogging site Weibo, with the normal censorship of discussion on top leaders strangely absent. Many people expressed support for Bo."With the anti-mafia heroes Bo and Wang both gone, what are we going to do now?" wrote Jin Zhiheng.The man who takes in Chongqing, Vice Premier Zhang, studied economics in North Korea and is a former party boss in the export-dependent southern province of Guangdong. Unusually, he retains his vice premiership despite his new position.Xinhua did not mention whether Bo could lose his seat in the Politburo, a central decision-making body that sits under the more powerful Standing Committee. The Politburo itself would have to make that decision.The mayor of Chongqing, Huang Qifan, widely seen as the brains behind the city's elaborate growth plans, appeared to survive the fall of Bo, at least for now.Huang said he would "resolutely support the handling of the Wang Lijun incident, and the adjustment of the municipal leadership," the news reports said, citing the Chongqing television broadcast.

NEWS,02.02.2012

Portuguese strike flops, workers fear for jobs

The trains ran and the buses, too. Staff made it to work and shops and banks opened across Lisbon. Weak backing for a transport strike on Thursday reflected a broader lack of appetite for militant action by workers concerned for jobs threatened by Portugal's growing debt crisis. Already facing its worst hardship in decades, Portugal has come under increasing pressure over the last month on fears it will be forced to seek another bailout beyond its current 78-billion-euro lifeline or restructure its debts like Greece. Italian, Irish and Spanish bonds rally, but Portugal's remain mired in doubt Lisbon can handle its debt. Government austerity measures are biting. Unemployment is above 12 percent and expected to rise further in the poorest country in Western Europe. However, the strike appeared to have little impact. Trains and buses were running. Only Lisbon's metro and ferries shut down.” They are raising the prices and now there is a strike as well, this is annoying," said Rosario Mendes, a janitor waiting for a bus to return home from her early shift. "We can't go on strike, there are no jobs.” Shops and commerce was functioning normally in Lisbon. Even union officials acknowledged the strike was weak.” We are analyzing why (train and bus) workers didn't mobilize as we had expected," said Jose Manuel Oliveira, a coordinator for the FETRANS transport union.The Portuguese have so far shown little passion for the kind of violent protests and strikes that have hit Greece during its crisis. Portugal has few traditions for widespread protest. The situation is similar in neighbouring Spain despite 23 percent unemployment. A general strike in November 2010 had limited impact. Spain's unions have lost clout and credibility. There is also wide-spread sentiment in Spain that families and the government lived beyond their means during a 10-year-long housing and construction boom. Nor has there been much sign of widespread militancy in France or in Italy. Thursday’s strike in Portugal was aimed at government efforts to restructure public transport companies, which have huge debts and will almost inevitably lead to job losses. The government has not yet detailed its plans.” This strike was premature and badly explained by the organizers, as the government has not yet outlined its plans for the transport restructuring," said sociologist Elisio Estanque at Coimbra University. "So it does little but caricature and vulgarizes the strike movement.” Portugal’s second-largest umbrella union, the UGT, reached an agreement with the government and employers last month on labor reforms that will make it easier to hire and fire workers, boosting competitiveness.UGT chief Joao Proenca said his decision to sign up to the agreement was motivated by his view that Portugal's lenders -- the European Union and IMF -- are under pressure to listen to unions in order to avoid a failure like in Greece. That should give unions greater clout in future reforms of the economy. Since Portugal's crisis began there have been only two general strikes -- one in November last year and one in November the previous year. There have been some sporadic strikes, such as train drivers and port workers, but they have related to specific issues in the sector, not in general against austerity measures. But, as Portugal enters the harshest year of austerity and recession under its bailout there are still risks that social protest could flare up, especially if the government decides to adopt further cost-cutting measures to meet budget goals. It has already effectively eliminated two months' pay for civil servants, cut health and pension spending and raised taxes across the board. Prime Minister Pedro Passos Coelho said this week he would meet the terms of the bailout "whatever the cost.” Another factor that could have undermined the union movements a split between the moderate UGT and the more radical CGTP, which refused to sign the labour reform agreement with the government and is affiliated to the small Communist Party.

"Prices are soaring; they are robbing the people and sinking the country. Reject the pact of aggression," read Communist Party banners plastered around Lisbon, in reference to the labor reform accord. Economic reality -- whether the slump deepens or the first signs of recovery appear this year -- may well end up being the key factor in deciding whether more workers join protests. Still, the challenges have only increased since many investors started believing Portugal may have to seek more bailout money, putting Lisbon further behind the recovery seen in Ireland, the euro zone's other bailed-out country."If we manage to get closer to Ireland and not Greece, strife should subside, but if more draconian austerity measures are imposed, there will be a limit after which popular discontent will spill over to the streets," said Estanque.