NEWS,25.11.2012

Thousands of Italians rally against austerity

Tens of thousands of students and workers rallied across Italy today, to protest against austerity measures imposed by Prime Minister Mario Monti's technocrat government.Appointed a year ago when Italy came close to a Greek-style debt crisis, Monti has pushed through painful tax increases and spending cuts to try to rein in public finances at a time when schools and universities say they desperately need more support."We need to fight for our rights. This government doesn't represent us and these austerity measures and all the cuts they've introduced are totally anti-democratic," said student protester Tommaso Bernardi, attending a rally in Rome.Far-right group Casapound marched through the capital Rome later on Saturday, chanting "Monti, go away!". Anti-fascists staged a counter-demonstration in another part of town."This government is making the nation starve and is destroying the social welfare system," said Casapound president Gianluca Iannone. "The weakest are hit hardest - the disabled, students and single-income families."Police organised different routes and times for the rallies to reduce the risk of violence after scuffles broke out between police and demonstrators during protests on November 14 that saw the police criticised for heavy-handed tactics.Several thousand students and workers also rallied in other cities including Naples, Florence and Catania.No clashes were reported but the widespread protests highlighted the scale of discontent in the recession-hit country ahead of parliamentary elections next year."We need to change this country, starting from investments in schools, universities and culture," said Michele Orezzi, a university union coordinator, adding that Italy's education system was "crumbling into pieces".With youth unemployment at about 35%, more than three times the national average, and Monti's austerity policies biting into education spending, school pupils and university students have taken an active role in anti-government protests.Much anger is focused on an education reform bill going through parliament that would give schools more autonomy and allow them to accept other sources of funding than the state. Protesters believe this is intended to encourage privatisation.Students have occupied schools around Rome in recent weeks to express their anger and frustration at repeated funding cuts, chaining gates shut and camping inside classrooms.Monti has defended his austerity plan, saying he believes his technocrat government will be remembered for having helped Italy pull itself out of a deep economic crisis without needing to resort to external aid.Italy has been the European Union's most sluggish economy for more than a decade, fuelling investor concerns about its ability to bring down public debt of around 126% of output.

World Week Ahead: Deal or no deal for Greece?

Two deals might help extend last week's momentum on equity markets in the US and Europe -one that helps the US avoid its fiscal cliff and a second that would end the immediate threat of Greece defaulting on its debt.Optimism was fuelled on both fronts last week, though the timing for an agreement by US lawmakers on preventing automatic tax increases and spending cuts worth about US$607 billion set to kick in on January 1 remains more open-ended. Officials from the White House and Congress will resume negotiations this week.US President Barack Obama said on November 18 he was "confident" a new US budget deal would be reached. Meanwhile, EU commissioner Olli Rehn on Thursday said he saw no reason a deal on Greece could not be concluded tomorrow when euro-zone finance ministers, the International Monetary Fund and the European Central Bank meet again.Greek Finance Minister Yannis Stournaras expressed confidence that the IMF would ease earlier deficit targets imposed on the debt-stricken nation, thus opening the door to the transfer of more funds."It's a done deal," Stournaras told reporters in Brussels on Friday after meeting with EU officials and IMF Managing Director Christine Lagarde, Bloomberg reported.Commitment to resolving budgetary and debt issues that risk hampering both US and European economies bolstered stocks last week.In the Thanksgiving holiday shortened week in the US, the Dow Jones Industrial Average gained 3.3%, the Standard & Poor's 500 advanced 3.6% and the Nasdaq Composite climbed 4%.In the past five days, the benchmark Stoxx Europe 600 Index jumped 4%. It is the first time the gauge has gained every day of the week since July 1, 2011, according to Bloomberg.The advance in European stock prices came even though EU leaders struggled to see eye to eye in talks about the next seven-year budget for the region and a two-day meeting late last week ended in failure.European Council President Herman Van Rompuy said they decided to abandon the special summit on the 2014-2020 EU budget, worth about 1 trillion euros, and would try to reach a compromise early next year, according to Reuters.On the US economic front in the days ahead, investors will eye the latest reports on durable goods orders and consumer confidence on Tuesday, weekly jobless claims on Thursday, the Chicago Purchasing Managers Index and personal income and outlays on Friday. The Federal Reserve's beige book is due on Wednesday.Also, three reports on the housing market might confirm the recent data indicating strength and optimism in this industry's pace of recovery.The S&P/Case-Shiller home price index for September, due Tuesday, is expected to show the eighth straight month of increases, while new home sales for October, due Wednesday, and October pending home sales data, due Thursday, are also expected to show a stronger housing market.The US Treasury is set to auction US$35 billion of two-year notes on Tuesday, US$35 billion of five-year securities Wednesday and US$29 billion of seven-year debt on Thursday.The first clues on how retailers fared on Black Friday, the day after Thanksgiving, will also provide a helpful indicator on the state of the American consumer. The National Retail Federation predicts sales during the holiday season to increase 4.1% this year, down from last year's 5.6% growth.On Friday, Europe offered some surprisingly good economic news. The Ifo institute's business climate index unexpectedly rose, climbing to 101.4 in November from 100 in October, the first increase in eight months.That helped the euro finish what had already been a good week on an even more positive note, rising 1.8% against the greenback and climbing 3.2% against the Japanese yen in the past five days."Certainly sentiment towards euro has changed," Camilla Sutton, chief currency strategist in Toronto at Bank of Nova Scotia, told Bloomberg News. The euro "rallied slightly again after we got German confidence numbers, which highlighted better-than-expected business sentiment."

International arbitration for tax disputes

The United States is undefeated in the nearly two years since it began settling corporate tax disputes with Canada through a winner-takes-all process popularly known as baseball arbitration.Tax lawyers and accountants in both countries said the US Internal Revenue Service had won three of the binding decisions and Canada none. They said the IRS had collected a significant sum of money, possibly in excess of $100m.Launched in December 2010, the arbitrations follow the rules for resolving salary disputes between Major League Baseball players and their teams. In the tax game, however, the companies forced to pay and the payments remain confidential. The United States has had similar agreements with France since 2004 and Belgium and Germany from 2006, but no cases involving them have gone to baseball arbitration, the tax experts said.Baseball arbitration plans are in pending tax treaties with Hungary, Luxembourg and Switzerland. Future treaties with the United Kingdom and Japan may have the same provisions, tax experts said.The arbitration process arises often in tax questions involving a multinational company's transfer pricing taxes, where two countries disagree over which of them should collect corporate taxes. The winning country gets the tax revenue. The loser goes home empty-handed. Companies like the baseball arbitration provision because it lends certainty to their tax bills. Companies can request that countries go to arbitration if revenue agents cannot settle their tax disputes in two years.Aiming too high?The arbitration panels are made up of three experts, one chosen by each country and the third by the other two experts. Revenue agents from each country submit a tax bill number to the panel. The panel picks the number it thinks is closest to the right answer. Tax experts on both sides said Canada had lost all three disputes because it was trying to hit home runs  seeking too much in taxes during arbitration."Canada has lost three in a row," said Dale Hill, a former manager of Canada's cross-border tax negotiations with the United States and a partner with Gowling Lafleur Henderson LLP in Ottawa. "Maybe Canada has been more aggressive," Hill said.David Rosenbloom, a Washington, DC-based US tax lawyer at Caplin & Drysdale, said: "The Canadian Revenue Agency has developed over the years a habit of taking really extreme and unwarranted positions. It's almost as though they're unaware arbitration is in the treaty." Richard McAlonan, who directs the IRS negotiating program,his month that the agency had resolved a "handful" of the cases. He declined further comment. The Canadian Revenue Agency said in a statement that it prefers to resolve its tax disputes with the United States "at the negotiating table". Going to arbitration "would be the last resort", the CRA said. It declined to comment on the cases, citing confidentiality rules in the treaty. Canada's losses may mean its revenue agents will be more cautious in tax negotiations with the United States. The countries negotiate 75 to 100 cases a year, Hill said. "It's going to get tougher for Canada to negotiate," he said. Treaties pending The tax treaties with Hungary, Luxembourg and Switzerland passed the US Senate Foreign Relations Committee in 2011. But Republican Senator Rand Paul has so far prevented all three treaties from going before the full Senate.A spokesperson for Paul could not be reached for comment. Paul has previously objected to the treaties' provisions that require more sharing of US taxpayer information. New treaty arbitration provisions with Switzerland and the UK would especially benefit the pharmaceutical industry, while auto companies would appreciate the provision in a Japanese treaty, said Lorraine Eden, a professor at Texas A&M University.Companies in both sectors have a lot of transfer pricing tax uncertainty and can face double taxation if unable to force countries into binding arbitration, she said.UK-based GlaxoSmithKline reached a $3.4bn transfer pricing settlement with t he IRS in 2006. But the UK did not accept the US settlement, and Glaxo faced UK taxes on the same profits, Eden said."Would they like the opportunity to go to binding arbitration and settle this? Absolutely," Eden said.

NEWS,03.11.2012

President Barack Obama

As the 44th president of the United States, Barack Obama, aged 51, passed a revamp of the national healthcare system and authorised the raid that killed Osama bin Laden but struggled to revive the economy and create jobs.Ahead of the US presidential election on Tuesday, here are key facts about Obama, the nation's first black president.Barack Obama has a personal background like no other president in US history. His mother, Ann Dunham, was a white woman from Kansas and his father, Barack Obama Snr, was a black Kenyan who saw little of his son after a divorce when the boy was a toddler. Obama spent much of his childhood in Indonesia and then Hawaii, where he lived with his maternal grandparents.Obama struggled with his mixed racial background while growing up, writing in a memoir that he wondered "if something was wrong with me". He also was troubled by the absence of his father, who he considered a "myth", and said that may have contributed to him using marijuana and cocaine in his youth.Obama graduated from New York's Columbia University in 1983 and then worked in the business sector in New York and for a Chicago community group. In 1988 he went to Harvard Law School, where he became the first black president of the prestigious Harvard Law Review.Obama's relationship with Congress is not great. Even when Democrats controlled the House of Representatives and the Senate, Republicans often stymied his initiatives. The situation became more difficult when tax-averse Republicans took over in the House in 2010.In the early 1990s Obama worked in a voter registration campaign in Chicago, taught constitutional law at the University of Chicago and joined a law firm that specialised in civil rights and neighbourhood development. He married Michelle Robinson, who he met at a law firm when he was an intern and she was assigned to be his adviser.In his rare spare moments, the lanky Obama pursues his lifelong love of basketball with semi-regular games at an FBI gym. He also makes time for school functions and sports events of daughters Sasha and Malia and tries to get out for an occasional "date night" with his wife.Obama's political career began with election to the Illinois State Senate in 1996 and soared in 2004 when he gave a rousing keynote address at the Democratic National Convention. In November of that year he was elected to the US Senate.Obama won the 2008 Democratic presidential nomination by defeating Hilary Clinton, the former first lady and New York senator, and then took the presidency by beating Republican Senator John McCain. His energetic campaign was built on a theme of "hope and change" fuelled by powerful oratory.A mood of national optimism prevailed at Obama's 20 January 2009, inauguration, which drew an estimated 1.8 million people to the National Mall in Washington despite bitter cold. He began his presidency with a 68% approval rating.Obama simultaneously oversaw wars in Iraq, which he ended in 2011, and Afghanistan, as well as the US military involvement in Libya that helped oust Muammar Gaddafi. In May 2011 he authorised the raid in which US Navy Seals killed al-Qaeda leader Osama bin Laden in Pakistan - a triumph he points to as indicative of a strong national security policy.Obama inherited an economic crisis so persistent that it remains a threat to his re-election. Almost 800 000 jobs were lost the month he took over. In the early days of his administration, he pushed through an $831bn economic stimulus package and renewed loans to automakers, even making the government a temporary part-owner of General Motors.The centrepiece of his domestic agenda was the Affordable Care Act, the healthcare reform law better known as Obamacare. Its purpose is to give all Americans affordable insurance and more protections but critics say it is expensive federal interference. A key aspect of the reform requiring most Americans to get insurance or pay a penalty survived a 2012 US Supreme Court challenge.Obama has a reputation as a charming communicator but he also is criticised for being aloof and not building better relationships with congressional leaders. Some have questioned his preparation skills, especially after a sub-par performance in a presidential debate with Republican opponent Mitt Romney.

Romney, Obama power into final weekend

President Barack Obama and Republican foe Mitt Romney on Saturday power into a final weekend of campaigning before handing their fates to voters after a bitter, gruelling White House race.The rivals will chase one another through the battleground states that will decide Tuesday's election, with Obama seeking to solidify his midwestern line of defence, while Romney seeks an eleventh hour breakthrough.Obama will campaign in Ohio, the possible tipping point state, before heading to Wisconsin and Iowa, his trio of "firewall" battlegrounds ahead of a late night rally in Virginia, where he still hopes for an insurance win.Romney, fresh from the biggest rally of his campaign, which drew around 18 000 people on a cold night in West Chester, Ohio, on Friday will travel to New Hampshire, Iowa and Colorado.In a show of close combat on the last weekend of the campaign, both candidates will be in the eastern Iowa town of Dubuque, within hours of one another.Romney warmed up for the frenzied last weekend with a huge rally in Ohio, bringing together his former primary rivals Rick Santorum and Rick Perry, along with Obama's 2008 rival John McCain.In all, 45 lawmakers and relatives of the candidate and running mate Paul Ryan wearing Romney jackets attended the rally near the Republican stronghold of Cincinnati."We're almost home. One final push will get us there," Romney said before a crowd police estimated to be at least 18 000 strong. "We are so very, very close. The door to a brighter future is there, it's open, it's waiting for us."Obama had earlier evaded a last-minute time bomb as the economy pumped out more jobs than expected in October, delivering a boost to his re-election hopes as the final weekend of campaigning begins.Romney, however, seized on an uptick in the jobless rate by a tenth of a point to 7.9% to bemoan an economy at a "virtual standstill".After several weeks of polls suggesting a neck-and-neck race, there were new signs that Obama's position, as he seeks a second term, may be solidifying.National polls of the popular vote now mostly show a tied race or with either man up one point but with time running out Obama's position in key battleground states seems to be holding.The candidate that wins the White House will need to mass 270 electoral votes on the state-by-state map.Obama is asking voters for a second term, despite the sluggish economic recovery, while Romney is seeking a quick comeback for Republicans after George W Bush left office in 2009 with the party in disarray.All Obama's polling leads were within the margin of error, however, and both campaigns, though expressing confidence, will face a nervous night as results roll in on Tuesday and test their assumptions about the race.Obama, perhaps mindful of millions of Americans suffering from the lingering impact of the worst recession since the 1930s, avoided a triumphal tone on the jobs data that sent relief rippling through his campaign team."We have made real progress," Obama said, in Hilliard, on the first stop of a day-long swing through small towns in Ohio, which could be a tipping point state in a tied-up election.Romney highlighted the fact that, although the economy is creating jobs at a moderate pace, unemployment remains at historically high levels."For four years, President Obama's policies have crushed America's middle class," Romney said in a statement."When I'm president, I'm going to make real changes that lead to a real recovery, so that the next four years are better than the last," said Romney, who started his day in Wisconsin and ended it in Ohio.The release of the final major economic data before the election had worried Obama aides who feared that a leap in the rate above the psychological 8% mark could have sent late-deciding voters to Romney.But although the data was far from spectacular - with 171 000 jobs created last month - there was enough in the report, including upward revisions of previous monthly figures, for Obama to argue the economy was improving.Obama, campaigning in Ohio on Friday repudiated Romney's claim to being an agent of change, accusing him instead of trying to "massage the facts", highlighting a Romney ad that claims that Chrysler plans to outsource jobs to China to produce its Jeep vehicles."I know we are close to an election, but this isn't a game. These are people's jobs. These are people's lives," Obama said, noting that auto bosses had directly contradicted Romney on the attack.The president repeatedly touts his decision to bail out indebted US automakers in a politically unpopular 2009 move that helped restore the industry to health.One in eight jobs in Ohio are linked to the sector, and Romney's opposition to the bailout has emerged as a liability for the Republican.A CNN/Opinion Research poll showed Obama up three points in Ohio, raising his average in the RealClearPolitics aggregate of opinion surveys in the state to 2.4 points.The president also leads Romney in enough of the eight or so swing states to assure himself of the 270 electoral votes needed for re-election, if polling data is confirmed by voting.

Romney hits Obama on 'revenge' vow

Republican nominee Mitt Romney chided President Barack Obama on Saturday for calling on Americans to vote for "revenge" as the battle for the White House raced to an ill-tempered climax.Three days before voters chose between giving Obama a second term or sending him packing back to Chicago, the rivals chased one another through a handful of states that will decide Tuesday's too-close-to-call election.Romney was up early in New Hampshire, which has only four of the 270 electoral votes needed to claim the White House but could punch above its weight in a tight finish, accusing Obama of "demonising" political foes."I won't represent just one party, I'll represent one nation," Romney told a crowd at an airport rally outside Portsmouth, and warned Obama would find it impossible to work with congressional Republicans if he wins re-election.Romney also debuted a new political ad on Saturday, seizing on Obama's comment in Ohio on Friday when he told supporters angry at the Republicans not to boo but to vote, saying "voting's the best revenge".The ad featured Romney telling his biggest crowd of the campaign in Ohio also Friday that Obama "asked his supporters to vote for revenge - for revenge"."Instead, I ask the American people to vote for love of country," Romney said.While Romney was campaigning, Obama was back in Washington visiting the headquarters of the Federal Emergency Management Agency (FEMA) as New York and New Jersey struggle to deal with the aftermath of murderous superstorm Sandy."We still have a long way to go," said Obama, stressing he had no time for government "red tape" which could hold up the relief effort, after discussing the crisis with the governors of New Jersey, Connecticut and New York.The Obama campaign enjoys the comparison between Obama doing his job managing the government while Romney campaigns as polls show a majority of Americans approve of the president's handling of Sandy.With time running down until the election, Obama soon headed back to the campaign trail, with a long day of campaign stops planned in Ohio, the possible tipping point state before heading to Wisconsin and Iowa.He will wrap up his day with a late night rally in Virginia, a state where he and Romney are locked in a tight race.Romney, fresh from the biggest rally of his campaign, which drew at least 18 000 people on a cold night in West Chester, Ohio, left New Hampshire for trips to Colorado and Iowa.In a show of close combat on the last weekend of the campaign, both candidates will be in the eastern Iowa town of Dubuque, within hours of one another.Latest polls show Obama and Romney tied nationally, but Obama appears to be solidifying his position in enough of the eight or so swing states that will decide the election to support his hopes of a second term.New surveys by the Wall Street Journal and NBC News Saturday showed the president up by 47-49% in Florida and leading Romney by 51-45 % n Ohio, double the margin in the current RealClearPolitics average.A Mason Dixon poll for the Miami Herald, however, had Romney up by six points in Florida, which the Republican, who also needs Ohio, cannot afford to lose if he is to be elected America's 45th president.The Obama and Romney campaigns have sharply differing views of the race.The president's team believe that early voting and polling data, plus the president's grass roots turnout machine, mean that Obama will prevail in a close race.But Romney's camp believes opinion polls are overstating the proportion of Democrats in the electorate and that their candidate is poised to ride the support of independent voters to victory on Tuesday.On Friday, Obama earlier evaded a last-minute time bomb as the economy pumped out more jobs than expected in October.Romney, however, seized on an uptick in the jobless rate by a tenth of a point to 7.9% to bemoan an economy at a "virtual standstill".Obama, campaigning in Ohio Friday repudiated Romney's claim to being an agent of change, accusing him instead of trying to "massage the facts", highlighting a Romney ad that claims that Chrysler plans to outsource jobs to China to produce its Jeep vehicles."I know we are close to an election, but this isn't a game. These are people's jobs. These are people's lives," Obama said, noting that auto bosses had directly contradicted Romney on the attack.The president repeatedly touts his decision to bail out indebted US automakers in a politically unpopular 2009 move that helped restore the industry to health.One in eight jobs in Ohio are linked to the sector, and Romney's opposition to the bailout has emerged as a liability for the Republican.

NEWS,18.10.2012

Clashes erupt at Greek anti-austerity protests

Greek police clashed with anti-austerity protesters hurling stones and petrol bombs on the day of a general strike that brought much of the near-bankrupt country to a standstill.In the second major walkout in three weeks, almost 40,000 protesters marched in Athens in a bid to show EU leaders meeting in Brussels that new wage and pension cuts will only worsen their plight after five years of recession.Tensions mounted when a small group of protesters began throwing pieces of marble, bottles and petrol bombs at police barricading part of the square in front of parliament, prompting riot police to fire several rounds of teargas to disperse them.A 65-year old protester died of a heart attack, hospital sources. Another three people were injured. Police detained about 50 protesters suspected of attacking them.Most business and public sector activity ground to a halt at the start of the 24-hour strike called by the country's two biggest labour unions, ADEDY and GSEE."Enough is enough. They've dug our graves, shoved us in and we are waiting for the priest to read the last words," said Konstantinos Balomenos, a 58-year-old worker at a water utility whose wage has been halved to 900 euros and who has two unemployed sons.It was the third time since late September that tens of thousands of Greeks have taken to the streets holding banners and chanting slogans to show their anger at austerity policies imposed by EU and IMF lenders in exchange for aid.Some were carrying Greek, Spanish and Portuguese flags and shouted: "EU, IMF out"."Agreeing to catastrophic measures means driving society to despair and the consequences as well as the protests will then be indefinite," said Yannis Panagopoulos, head of the GSEE private sector union, one of two major unions that represent about 2 million people, or half of Greece's workforce.Greece is stuck in its worst downturn since World War Two and must make at least 11.5 billion euros of cuts to satisfy the "troika" of the European Commission, European Central Bank and IMF, and secure the next tranche of a 130-billion-euro bailout.Lenders demand austerity European Union leaders will try to bridge their differences over plans for a banking union at a two-day summit which starts on Thursday. No substantial decisions are expected, reviving concerns about complacency in tackling the debt crisis which exploded three years ago in Greece.The austerity policies being pursued in Europe's indebted Mediterranean countries at the behest of Germany and other rich euro zone members will drive the euro apart, protesters warned."This can't go on. We sure need measures but not as tough as the ones (German Chancellor Angela) Merkel is asking for," said Dimitris Mavronassos, a 40-year-old shipyard worker who has not been paid for six months.The strike emptied streets and offices in Athens. Ships stayed in port, Athens public transport was disrupted and hospitals were working with emergency staff, while public offices, ministries, bakeries and other shops were shut.Newspaper kiosk owners, lawyers, taxi drivers and air traffic controllers were among those protesting over the cuts, which include further drastic reductions in welfare and health spending.Opinion polls show rising anger with the terms of the bailout keeping the economy afloat, and Greeks becoming increasingly pessimistic about their country's future."The new, painful package should not be passed," the ADEDY public sector union said in a statement."The new demands will only finish off what's left of our labour, pension and social rights."During Hundreds of youths pelted riot police with fire bombs, bottles and chunks of marble Thursday as yet another Greek anti-austerity demonstration descended into violence, less than a month after more intense clashes broke out during a similar protest.Authorities said around 70,000 protesters took to the street in two separate demonstrations in Athens during the country's second general strike in a month as workers across the country walked off the job to protest new austerity measures the government is negotiating with Greece's international creditors.Thursday's strike was timed to coincide with a European Union summit in Brussels later in the day, at which Greece's economic fate will likely feature large.Riot police responded with volleys of tear gas and stun grenades in the capital's Syntagma Square outside Parliament as protesters scattered during the clashes, which continued on and off for about an hour. Another general strike in late September had also seen limited, but much more intense, clashes between protesters and police.A 65-year-old protester suffered a fatal heart attack during the demonstration but efforts to revive him failed. The organizers of the protest march he participated in said the man had fallen ill before any rioting had broken out.Four demonstrators were injured after being hit by police, volunteer paramedics said. The Health Ministry said two of the protesters were treated in hospital and that their injuries were not serious. Three policemen also required hospital treatment.Hundreds of police had been deployed in the Greek capital ahead of the demonstration. Police said seven people were arrested Thursday, out of more than 100 detained.The strike grounded flights, shut down public services, closed schools, hospitals and shops and hampered public transport in the capital. Taxi drivers joined in for nine hours, while a three-hour work stoppage by air traffic controllers led to flight cancellations. Islands were left cut off as ferries stayed in ports.Athens has seen hundreds of anti-austerity protests over the past three years, since Greece revealed it had been misreporting its public finance figures. The country has been surviving since then with the help of two massive international bailouts worth a total (EURO)240 billion ($315 billion). To secure them, it has committed to drastic spending cuts, tax hikes and reforms, all with the aim of getting the state coffers back under some sort of control.But while significantly reducing the country's annual borrowing, the measures have made the recession worse. By the end of next year, the Greek economy is expected to be around three quarters of the size it was in 2008. And with one in four workers out of a job, Greece has, along with Spain, the highest unemployment rate in the 27-nation European Union."We are sinking in a swamp of recession and it's getting worse," said Dimitris Asimakopoulos, head of the GSEVEE small business and industry association. "180,000 businesses are on the brink and 70,000 of them are expected to close in the next few months."The country's four-month-old coalition government is negotiating a new austerity package with debt inspectors from the EU, International Monetary Fund and European Central Bank. The idea is to save (EURO)11 billion ($14.4 billion) in spending largely on pensions and health care and raise an extra (EURO)2.5 billion ($3.3 billion) through taxes."In 2011, only 20 percent of businesses were profitable," Asimakopoulos said. "So these new tax measures present small businesses with a choice: Dodge taxes or close your shop."After more than a month and a half of arguing, a deal seems close. On Wednesday, representatives from the EU, International Monetary Fund and European Central Bank, said there was agreement on "most of the core measures needed to restore the momentum of reform" and that the rest of the issues should be resolved in coming days.

Why Spain's Economic Doldrums Could Be Good For Startups

 

Spain is having a rough month. Again.Standard & Poor's downgraded its rating on the country by two notches last week, which has brought Spain close to junk status. On Saturday, thousands of people marched through the streets of Madrid, where they protested the Spanish government's latest austerity cuts. And the country's hiring situation remains bleak, with unemployment hovering around 25 percent.But could this kind of sour environment ultimately turn out to be a sweet one for start-ups?"This landscape is perfect for entrepreneurship," says Josemaria de Churtichaga, associate dean for IE School of Architecture in Madrid. "I'm not defending the crisis but in some way the crisis is helping to change or should help to change the attitude within the young people, which I think is the mass that is suffering more -- and, at the same time, is the mass that has been living too well for the last decades, too protected from their parents, too protected by the state."Certain universities in Spain are more aggressively pushing for the creation of homegrown entrepreneurs who could launch and oversee new ventures and the Spaniards who might work there. One tactic, besides teaching courses on entrepreneurship: getting students from business schools as well as engineering or science departments to participate in startup or acceleration labs, and prepping recent grads to pitch their business plans in front of potential investors. But the academic efforts may also mean students both those wanting to launch a business, and others seeking a job at an existing organization need to be taught to become much more competitive as a way to survive in Spain's uncertain economy. "I sometimes wonder whether we should emphasize more some facets of managerial personality, like competition," says Santiago Iniguez de Onzono, dean of IE Business School in Madrid. "Should we make our graduates more fierce, more willing to compete in a really tough way as some others do?"Companies are also playing a nurturing role in the growth of new startups. Everis, a technology consultancy that is headquartered in Madrid, hosts speed dating-like meetings between entrepreneurs and investors, who boast more than 40 million euros in funds to help grow startups during the first stage of operation. The initiative could spur innovation and job creation in the country's tech sector, says David Garcia Hernandez, a director at Eversis.Creative minds have also carved out a space in an old garage near Madrid's CaixaForum Museum for entrepreneurs who want to start or nurture enterprises with a socially driven mission. Known as Hub Madrid, which launched three years ago, it is designed to be a shared working space where member entrepreneurs "are challenging you, provoking you, inspiring you to do what it is you're passionate about and also makes an impact," says Max Oliva, a Hub Madrid co-founder. Around 300 members have been paying between 15 to 300 euros a month to garner access to this shared space. It encourages collaboration through rounded desks, where there is no hierarchical "head" of the table, as well as non-ergonomic seats that regularly "encourage" people to get up and mingle near the kitchen or a library built of old wine cases. A second floor is being completed, where giant holes punched through the walls are supposed to encourage more discussion flow and better opportunities for eavesdropping, which could lead to new collaborations. "It's an ever-changing space to provoke sparks, to provoke accidents, to provoke failures that are positive failures," says Churtichaga, who helped design Hub Madrid.Other companies are working closely with local universities to provide additional training to students who are looking for a leg up in a tough hiring climate. Emzingo, for one, sends MBA candidates from Spain and other countries from around the world to South Africa and Peru, where students work with NGOs to improve and expand operations through mini-consulting projects. The for-profit social enterprise provides students with leadership development training as part of the experience and is a growing network of alumni (more than 75 so far), including some who have landed jobs at companies such as McKinsey, PwC, Bayer and Johnson & Johnson. "We're working now [on] placement after the MBA, so that's an extra benefit that you get for going through the program," says Pablo Esteves, who is based in Madrid and works as Emzingo's director of branding and partnerships.

Exhibition explores love, hate of money

New York - How does money make you feel? Fearful, stressed, happy?

US financial guru Suze Orman has teamed with the producer of the popular Body Worlds exhibits for a new traveling show to look at how we relate to and understand money.Orman, media star and author of best-selling books on personal finance, described the finance-themed exhibit as "an extension of my life's work as a financial educator, and an innovative way to teach people about money".The interactive, multi-media exhibit, "Economia: Money Matters," will begin a five-year, nationwide next year, starting in Chicago. The admission-charging show will move on to other venues that include science and natural history museums.Gail Vida Hamburg, who designed and developed the exhibition, said she hit on the idea several years ago."I found a study about worry, stress and depression and their links to money or rather the lack of money ... I realized that I could synthesize all of this information into a designed exhibition with multimedia and interactives (displays)," said Hamburg, who designed the Body Worlds traveling exhibition of preserved human corpses that has toured Europe, North America and Asia.The Money Matters exhibit spans 7 000 square feet with galleries on phases of life ranging from College Road to Third Phase, or retirement. It aims to meet national and state financial literacy goals for children and adults.Hamburg, who founded museum exhibit firm Rainworks Omnimedia in 2010, believes the show's appeal is universal because money is something that everyone has a relationship with throughout life.Orman has described the show as a walk through the life of money, and the effect it can have on you."It will be entertaining," she said in a statement, "and when you're having fun learning, the lessons stay with you."Hamburg said she addressed finance's fear factor by engaging people with various exhibits and displays."How do you make it easy for visitors to understand the power of compounding?" she asked, adding that it has traditionally been taught with graphs or charts or calculators.She decided to approach it differently using visitor prompts, and entry into a computer terminal and to show the results through the growth of actual physical objects."We should all be so smart with money and channel our inner Suze Orman. But we're not and we don't. Unless you're an MBA or an economist or a freak, you don't want to read about SEP-IRA or social security or student loan interest rates."The goal of the exhibition "is to give visitors the tools and resources for financial self actualization," she added.

NEWS, 21.05.2012.

Markets regain ground

 

Markets recovered some ground on Monday on value hunting after last week's heavy losses, but investors remained wary over the eurozone despite world leaders calling for Greece to stay in the monetary union and for Europe to balance austerity with growth. MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.5%, buoyed by its technology sector which by far outperformed its peers with a 1.3% gain. Investors scooped cheapened blue chips, helping to lift tech-heavy Korean equity market above a key chart level. The pan-Asian index fell to a 2012 low on Friday, having lost about 6% in the week for its worst weekly performance in nearly eight months. European shares were likely to be even more cautiously traded than Asia, with financial spreadbetters predicting that major European markets would open down as much as 1%. US stock futures were up 0.5%, reflecting a lack of market direction. "Investors saw some attractive valuations in the big tech stocks, which was the most heavily-hit sector during last week's market plunge, but that's about as much additional risk that investors are willing to take on at this point," said Park Suk-hyun, an analyst at KTB Securities. Japan's Nikkei stock average gained 0.4%, after logging a seventh straight week of losses last week, its longest such losing streak since the third quarter of 2011. Leaders of G8 major industrialised nations meeting at the weekend vowed to take steps to combat financial turmoil and revitalise a global economy threatened by Europe's debt crisis, but they offered no specific prescription for debt-crippled Greece which holds fresh elections on June 17. "Today's move is merely a rebound from sharp losses on Friday and it doesn't have momentum to rise strongly. The G8 outcome lacked the punch to give much incentive for markets," said Hirokazu Yuihama, a senior strategist at Daiwa Securities in Tokyo. Currently, many market players see the main scenario as Greece staying in the euro and European leaders making some compromises to maintain financial lifelines for the country. But deepening banking sector instability in Spain heightened concerns about contagion from Greek political turmoil, keeping investors' risk-aversion intact at least until the Greek election makes clear whether the nation will stay or leave the euro, traders and analysts said. "There's a lot of talk and no substance. Until you get some certainty about Greece and the fear of contagion eases, the volatility is here to stay," said Savanth Sebastian, an economist at CommSec. Growth and fiscal austerity The euro inched up 0.1% to $1.2793, moving away from a four-month low of $1.2642 reached on Friday, which was not far from its trough of 2012. But investor nervousness prevented the yen, widely perceived as a safe haven, to ease significantly from its three-month high against the dollar of ¥79.001 hit on Friday. The yen stood at ¥79.18 on Monday. With a steadying euro, spot gold added 0.4% to $1 598.46 an ounce, after rising more than 1% on Friday. The G8 suggested mounting global support for highly indebted eurozone economies to be allowed to take less strict austerity measures and put more priority on stimulating growth. Reports also suggested Greece's anti-austerity forces could soften their stance to avoid a catastrophic outcome for the nation. Yuji Saito, director of foreign exchange at Credit Agricole Bank in Tokyo, said the G8 comments were positive, but it did not offer a buying incentive for the euro. Rather, he was eyeing whether the yen would breach its 200-day moving average, currently at ¥78.50, and trigger the yen's further climb. Saito said markets were turning to an upcoming European summit on May 23 and comments about the Greece election. The May 23 summit will focus attention on whether European leaders can strike a new balance between growth and the fiscal reforms deemed vital to fixing the eurozone's debt crisis and regaining market confidence in the single currency. Recent opinion polls show Greek voters are returning to the establishment parties that negotiated its bailout, offering potential salvation for European leaders. Alexis Tsipras, the Greek leftist who polled strongly in the inconclusive May 6 election, says he wants talks to keep Greece in the euro. He is looking to forge ties with likeminded European figures such as French President Francois Hollande. Oil prices recovered on Monday, with US crude up 0.5% at $91.90 a barrel, after falling more than 1% on Friday. Brent crude, which closed at its lowest in 2012 on Friday, rose 0.7% at $107.89 a barrel. China's premier called for additional efforts to support growth on Sunday, raising hopes for more stimulus steps to lift demand in the world's second largest economy. He also vowed to maintain his campaign to cool down its property market."Fear index" rising As risk aversion intensified on Friday, the CBOE VIX Volatility index, a gauge of investor anxiety that measures expected volatility in the Standard & Poor's 500 index over the next 30 days, rose 2.5% to close above 25 for the first time since mid-December. Asian credit markets stabilised on Monday on short covering after the G8 meeting, but underlying sentiment was defensive, traders said. The spread on the iTraxx Asia ex-Japan investment-grade index was little changed from Friday, when it reached its widest level since early January.

 

France's Hollande steals show in début

 

In his début in international summitry, Francois Hollande has made a splash - and held his ground on some sharply defined positions.France's new leader grabbed attention at both the weekend's Group of Eight summit in Camp David and at the Nato summit in Chicago ending on Monday, parleying his mandate from voters in a May 6 election and showing he has his finger on the pulse of the public back home.An informal European Union summit on Wednesday will cap his whirlwind first week as French president.Hollande first sped to Berlin to meet Germany's chancellor, he then painstakingly formed a Socialist-led French Cabinet. He jetted to Washington, where he mused about his cheeseburger fetish in an Oval Office get-to-know with President Barack Obama that helped replace memories of Hollande's America-friendly predecessor, Nicolas Sarkozy.Hollande held firm on his two trenchant positions at the summits: His call for pro-growth measures to juice up Europe's lagging economy overshadowed the G-8 meeting, and his promise to break with Nato by pulling French troops out of Afghanistan ahead of other alliance members weighed heavily on the summit in Chicago."There was no embarrassing moment for him, despite the fact that he came right out of the election," said Dominique Moisi, a political analyst with the French Institute of International Relations, IFRI. "The difficulty starts when he comes home... but we all know there won't be any miracles."So far, it's mostly been style over substance. Hollande offered few details about how he would put his plans into practice.The Socialist French president fills a seat that was occupied by Sarkozy, who was often dubbed "Sarko the American" and whose support for a hard line in Iran and Nato's intervention in Libya drew plaudits from US leaders - including Obama. But at home, Sarkozy's brash, in-your-face demeanour in part led to his fall from grace at the ballot box.CharmingSo far, Hollande has ushered in a more inclusive style as French president, and the charm offensive has borne fruit. The timing of the summits also played in his favour: Obama, whose re-election hopes hinge in large part on the American economy's prospects, echoed Hollande's call for pro-growth policies at Camp David on Friday and Saturday.That gave Hollande some momentum going into the Nato summit, where some allies frowned on his early-pullout promises both privately and publicly.Post-electoral honeymoons don't last forever. Much of the questioning that Hollande faced by his trailing press corps centred on his persona, such as his travels in America in 1974 to study a nascent fast food phenomenon and his rapport with other world leaders. Obama playfully teased him for wearing a tie to the casual-dress summit in the Camp David woods and called Hollande his "translator" for French journalists.When one reporter at a French press scrum outside Hollande's Chicago hotel on Monday asked the president if he felt "American," Hollande replied that "I don't know how to take the compliment, if that is one"."But I try to be a Frenchman, who discusses with the Americans - in the hope of making them understand that we have common interests," he said. "I don't try to play the American, and I don't need to play the Frenchman: Be myself."It was aw-shucks charm like that that helped put Hollande, a national lawmaker from rural central France, into the presidential Elysée Palace. Hollande made his name nationally for his quick-witted criticism against a string of conservative governments in France over the last decade, while leader of the Socialist Party.ArticulateAs president, he's morphing from critic to cheerleader. At the summits he subtly claimed credit for France putting on the agenda such ideas as growth, European-supported recapitalisation of ailing Spanish banks or eurobonds to help revive Europe's finances. But he's maintained his sober mindset about Europe's big economic problems.But his personal international rapports are being tested. For all their seeming comity in Berlin last week, Hollande and Chancellor Angela Merkel have lined up against one another politically on both Afghanistan and their prescriptions for European economic health. She champions austerity, he wants pro-growth policies; in Chicago, she reiterated her "in together, out together" mantra for Nato's Afghan mission.Hollande came to the US summits a virtual unknown and benefiting from relatively low expectations. He had first-time introductions to Obama, Merkel, prime ministers Dimitri Medvedev of Russia and Britain's David Cameron all this week. An aide to one of the other G-8 summit attendees, who declined to be identified so as to speak freely about inside details, said that Hollande came across as firm, articulate, and knowledgeable about the agenda items."So far, so good," the political analyst, Moisi, said of Hollande's début on the world stage. "I think what he had to prove was that he was a credible president of France. People had thought that he wasn't: Not just 'Mr Normal'" - an image Hollande campaigned on - "but banal."