Putin touts record Russian arms sales
Russian arms exports
reached a record $14 billion this year, President Vladimir Putin said today,
extending a run of record-breaking sales in recent years. The world's second
biggest exporter has cultivated new weapons clients in Southeast Asia and Africa, despite criticism that it is
failing to deliver the technological benefits of Western suppliers or the low
costs of emerging weapons exporter China. "Let's talk
about our results they are positive. We are reaching a record level of weapons
exports. Their total volume was above $14 billion," Putin said in a
televised meeting with officials. He said Russia had signed over $15
billion in new export contracts this year alone. He did not spell out when
deliveries on those deals were expected.Russia has faced Western criticism over
its weapons sales to the Syrian government, worth nearly $1 billion in
2011.Moscow says its arms deliveries to Syria, a long-time ally, do not violate
international law and are not intended to help President Bashar al-Assad's
government fight a 21-month-old uprising, but rather to fulfil Soviet-era
commitments. Russia has made clear it would use its UN Security Council Vote to
veto an arms embargo against Damascus, contending such a move would be one-sided
when rebels are able to obtain weapons via smuggling into territory they now
control. Moscow has reported no major arms deals with Syria this year. A major
order of fighter jets was not completed, although it remains unclear as to why.
Putin gave no specifics on Russia's main weapons
buyers.Top weapons clients also include Soviet-era client and regional Asian
heavyweight India, as well as Vietnam and other Southeast Asian nations wary of China's growing military
might.Putin said a major part of Russia's weapons business
includes upgrades and refurbishment of Soviet-era technology and hardware.
"We understand that competition in this sector of the international
economy is very high and very serious," he said. Exports from the world's
top producer, the United States, have hovered around $30 billion annually in
recent years.State arms exporter Rosoboron export accounts for around 80% of
all Russian arms sales in a given year and nearly 20 independent firms comprise
the rest with sales of spare parts and upgrades.
EU holds back on eurozone overhaul
European leaders
doused hopes of a radical eurozone overhaul on Friday, after brokering deals to
control banks and refloat Greece seen as adequate to stem the immediate
crisis.The last EU summit of a year that saw Greece close to bankruptcy and
bigger Latin countries pressured to overhaul their economies in line with
German demands saw a series of ambitious proposals effectively kicked into the
long grass.Despite worries over political uncertainty in Italy, flagship plans
to fix fundamental flaws criticised since the introduction of the single
currency were put to one side until late 2014 at the earliest.Europe's
effective paymaster, German Chancellor Angela Merkel, hinted that
"financial aid" could in the future be given to countries committing
to reforms as part of moves towards greater economic co-ordination in the
bloc.In the eurozone alone, joblessness is heading towards the 20 million mark
after a year of devastation and with recession set to last throughout much of
2013.However, the sense of imminent panic on financial markets that dominated
much of 2012 decision-making has receded significantly since the European
Central Bank (ECB) issued a long-resisted but near-unlimited guarantee in the
summer to stand behind countries in financial difficulty." No doors were
closed," said Jose Manuel Barroso, the head of the executive European
Commission. Yet ideas heavily promoted by EU President Herman Van Rompuy over
the last six months, including a central eurozone budget, seemed to fizzle
out.Van Rompuy said he would present another report to leaders in June 2013, as
well as proposing that national governments sign up to contracts with the EU on
reforms."All the hard work is beginning to pay off. A lot has been achieved
over the course of a year," he insisted. "This work is not over: the
dynamic will carry on in the coming year," pledged Van Rompuy. French
President Francois Hollande said that late-2014, when a new Commission is
installed, "would be the time we could envisage a new phase with a
modification of the treaties. "The resumption of loans to Greece followed
a successful plan to wipe tens of billions of euros from the country's debt
pile.A first payment of €34.3bn would be flowing to Athens "as early as
next week," said outgoing Eurogroup chair and Luxembourg Prime Minister
Jean-Claude Juncker.The accord prompted Greek Prime Minister Antonis Samaras to
declare that "Grexit", the idea that Greece would be forced out of
the 17-nation bloc, was "dead." "Greece is back on its
feet," declared an ecstatic Samaras, who has pushed through painful
economic reforms demanded by international creditors, sometimes in the face of
violent street protests. Meanwhile, the deal for the eurozone's largest banks
to come under the aegis of the ECB from March 2014 was hailed by its head Mario
Draghi as "an important step towards a stable economic and monetary union,
and towards further European integration".Despite a noticeably more
bullish tone at the summit, fears over Italy lurked in the background, after
Prime Minister Mario Monti, credited with important reforms there, said he was
stepping down soon. Former leader Silvio Berlusconi had hinted that he might stand
for a fourth time but appeared to row back, telling Belgian television that he
had "so much to do" outside politics. Hollande downplayed the chance
Berlusconi would run in a future election, saying: "I don't think there is
a very serious likelihood" of this."Merkel underlined a closing of
ranks at the summit. "I made clear that the government of Mario Monti has
done a great deal of helpful work for the confidence that Italy is now enjoying
again," she said. Leaders were to reconvene later Friday at 10:00am (09:00 GMT) to discuss moves towards a common security and defence policy as well
as to take a position on the Syria crisis.
Greece's lenders warn of 'very large' risks to bailout
Political resistance
and potential court challenges are among "very large" risks to
reforms required for Greece's bailout programme,
the country's European lenders said today. The long-awaited report from the
European Commission and the European Central Bank details the findings of the
"troika" of the EC, ECB and the International Monetary Fund on
Athens' efforts to meet targets under its latest rescue package.The report
formally confirmed that Greece deserved further aid under the 130 billion euro
($202-billion) bailout, and a Greek finance ministry source said Athens had received
a long-delayed instalment of over 34 billion euros in aid today. But the
lenders warned Athens still risked falling short on its commitments. "The key risks
concern the overall policy implementation, given that the coalition supporting
the government appears fragile and some components of the programme face
political resistance, despite the determination of the government," the
report said." Important budgetary measures are likely to be challenged in
courts, which could lead to the need to fill a fiscal gap emerging as a
consequence." Greece, which has been bailed out twice by the EU and IMF
since the debt crisis erupted, has a long history of missed targets and failure
to meet promises to overhaul its bloated state sector and liberalise its
recession-hit economy. A separate report by an EU task force today said by the
end of October Greece had completed only 88 of the targeted 300 audits of large
tax payers and 467 of 1300 audits of high-wealth individuals. Despite the
lingering doubts on Greece's commitment and ability to reform, the country's
lenders last week agreed to disburse aid to Athens after it bought back its own
debt at a fraction of face value, cutting its debt burden. The decision to
unlock aid - expected to total over 52 billion euros by the end of March removed
the spectre of a Greek bankruptcy and euro zone exit. Even so, Moody's ratings
agency said only further debt relief from official creditors, such as
governments, would put its debt back on sustainable footing. The agency
classified the bond buyback scheme as a "distressed exchange" and, as
a result, a default on the Greek government debt held by private bondholders. Prime
Minister Antonis Samaras's conservative-led government has promised to restore
the country's credibility but his coalition has faced attacks both from within
and outside on its plan to push through a new round of austerity. The troika's
report warned those spending cuts next year could hurt the weak economy more
than expected, though that could be stemmed by the government paying bills that
have been in arrears. Greece's economy will contract by about 6% this year its
fifth in recession and by a further 4.2% next year before growing 0.6% in 2014,
the report said. But growth would not return without a business reform drive. Criticising
influential business lobbies, it said reviving the economy would require
"breaking the resistance (to reform) of vested interests and the
prevailing rent-seeking mentality of powerful pressure groups".The report
acknowledged that privatisation proceeds had been disappointing so far but that
the programme had gained some momentum since September. It forecast revenue of
8.5 billion euros by 2016 from the asset sales, roughly a billion lower than Athens' own estimates in a
mid-term fiscal plan. "Doubts on the effectiveness of the governance of
the privatisation process however continue to persist," it said.
Wall Street gains as Obama and Boehner meet
Wall Street gained as
a meeting between US President Barack Obama and House Speaker John Boehner at
the White House today bolstered optimism a budget agreement will be reached
soon Wall Street took heart from the 45 minute gathering about which no further
details were released. In afternoon trading in New York, the Dow Jones
Industrial Average rose 0.62 %, the Standard & Poor's 500 Index gained
1.03%, while the Nasdaq Composite Index advanced 1.01%. The stakes are high for
the budget talks aimed at avoiding US$600 billion of tax increases and spending
cuts from taking effect on January 1; failure to reach an agreement might push
the US into recession in the first half of next year.Indeed, a report today
showed that manufacturing in the New York region contracted more than expected
in December, underpinning the fragility of the economy that prompted the US
Federal Reserve to expand its stimulus program last week."It's a historic
tug of war: pulling on one side is the fiscal cliff, pulling the other side is
continued global monetary easing," David Sowerby, a portfolio manager at
Boston based Loomis Sayles & Co, told Bloomberg News. "The most
positive thing for the market is valuation and an accommodative Fed policy. "In
Europe, the Stoxx 600 Index finished the session with a 0.1% decline from the
previous close. European Central Bank President Mario Draghi reminded investors
of the challenges ahead, even as he predicted a recovery in the second half of 2013 in comments at the European Parliament's Economic and Monetary Affairs
Committee. "We expect economic weakness to extend into next year with a
very gradual recovery in the second half of the year," Draghi said. Still,
"the medium-term outlook for economic activity remains
challenging."The central bank's new supervisory powers over banks in the
region will help restore confidence, Draghi said. Equity investors in Japan applauded the Liberal
Democratic Party's victory as leader Abe Shinzo plans aggressive fiscal and
monetary stimulus measures to revive the nation's economy that just tipped into
recession. The Nikkei 225 closed with a 0.9% gain.It's considered bad news for
the yen, however, which was last 0.4% weaker against the US dollar. Earlier in
the session, the yen dropped as low as 84.48 per dollar, the weakest since April 12, 2011, according to Bloomberg. The Bank of Japan is scheduled to start
a two-day policy meeting on Wednesday. Switzerland's UBS will pay around US$1.5 billion to settle charges that a group of
traders at its Japanese unit rigged Libor interest rates, Reuters reported,
citing a source familiar with the matter. UBS will admit that about 36 of its
traders around the globe manipulated yen Libor between 2005 and 2010, according
to the source, with a final deal not expected before Wednesday. Shares of Apple
fell initially after Citigroup cut its rating for the stock amid concern about
tapering demand for its iPhone 5. The stock rebounded, last up 1.2%.
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