NEWS,19.08.2012

Greece told to trim further €2.5bn

Greece's creditors say it must cut €14bn from its budget in the next two years, €2.5bn more than they originally demanded, German weekly Der Spiegel reported Saturday.The amount was revised upward as a result of the most recent audit mission by the country's so-called troika of bailout lenders, the European Union, the International Monetary Fund and the European Central Bank, Der Spiegel said.Troika auditors visited Athens recently and are expected to return in September, when they have said they will remain for the entire month.Based on that audit, the EU and IMF will decide whether to release Greece's next loan disbursement of €31.5bn.The Greek government is scrambling to slash its budget in order to access the funds, which it needs to keep it from defaulting on its debt and crashing out of the eurozone.Der Spiegel said the troika had ordered the extra cuts because planned privatisations were not shaping up to be as lucrative as hoped and tax revenues were falling short of forecasts as the economy struggled through its fifth year of recession.The auditors also said in a report that the government had so far been unable to show how it planned to reach the €11.5bn in savings it had already pledged to find for 2013 and 2014.

Obama slams Romney on taxes

President Barack Obama hounded Mitt Romney on Saturday, saying his wealthy rival would pay only 1% in taxes on his vast wealth under a plan authored by his running mate Paul Ryan.Obama escalated his effort to use the pick of the conservative Republican congressman last week to drive votes away from Romney in swing states, including New Hampshire, where he was campaigning Saturday."The centerpiece of my opponent's entire economic plan is a new five-trillion-dollar tax cut, a lot of it going to the wealthiest Americans," Obama said. "His new running mate, Congressman Ryan, he put forward a plan that would let governor Romney pay less than 1% in taxes each year, and here's the kicker - he expects you to pick up the tab."The president is demanding that Romney, a former venture capitalist, release more than the two years of personal tax returns he has already promised, and paints his rival as the epitome of a society tilted toward the rich.On Thursday, Romney insisted that he had always paid at least 13% in taxes, but that figure could still be politically damaging as it is much lower than the rate paid by most middle class Americans.Romney, estimated to be worth around $250m, has his income taxed as investment earnings, rather than as an annual salary, hence the lower rate, complicating his campaign to deny Obama a second term on November 6.In his budget proposal, Ryan would eliminate double taxation on interest, capital gains or dividends, reasoning that greater savings would lead to higher productivity and more investment.Romney has however said he would keep taxes on capital gains, interests and dividends at the current rate, but eliminate them entirely for those earning less than $200 000 a year.Obama cited a study by the bipartisan Tax Policy Centre that said that Romney's policies would result in middle class families paying an extra $2 000 a year, while the wealthiest Americans would get a big tax cut.But the Romney campaign said that after the release of new figures showing a rise in the unemployment rates in 44 states, it was not surprising the president was launching another attack."The fact is President Obama wants to raise taxes on private investment and job creators, which will lead to higher unemployment and fewer jobs," said Romney campaign spokesman Ryan Williams."The Romney-Ryan plan eliminates taxes for the middle class on interest, dividends and capital gains and implements pro-growth policies to deliver more jobs and more take-home pay for middle-class families."

 

Another food crisis looms - expert

With drought parching farms in the United States and near the Black Sea, weak monsoon rains in India and insidious hunger in Africa's Sahel region, the world could be headed towards another food crisis.Asia should keep a catastrophe at bay with a strong rice harvest while the G20 group of industrialized and emerging economies tries to parry the main threat, soaring food prices."We have had quite a few climate events this year that will lead to very poor harvests, notably in the United States with corn or in Russia with soja," warned Philippe Pinta of the French farmers federation FNSEA."That will create price pressures similar to what we saw in 2007-2008," he added in reference to the last global food alert, when wheat and rice prices nearly doubled.In India, "all eyes will be on food inflation - whether the impact of a weak monsoon feeds into food prices," Samiran Chakraborty, regional head of research at Standard Chartered Bank was quoted by Dow Jones Newswires as saying.Monsoon rains were 15.2% below average in mid-August, according to latest data from India weather bureau, and Asian rice prices are forecast to rise by as much as 10% in the coming months as supplies tighten.India and Thailand are two of Asia's leading rice exporters.Indian Food Minister Kuruppasserry Varkey Thomas told parliament this month that prevailing conditions "could affect the crop prospects and may have an impact on prices of essential commodities."Despite that warning however, the UN Food and Agricultural Organization expects rice output to slightly surpass "excellent results" recorded last year, though the FAO cut its global forecast for production of unmilled rice to about 725 million tons from its previous figure of 732 million.The world is feeling the onset of the El Nino weather phenomenon, which has a natural warming effect, is active in the western Pacific and expected to last until winter in the northern hemisphere, according to Japanese meteorologists.The US farm belt has been ravaged by the most stifling drought since the 1950s, and the country's contiguous 48 states have just sweltered through the hottest July on record.Corn production is probably at the lowest level in six years, the US Department of Agriculture said, and curtailed production will likely send corn and soybean prices to record highs, it added."Cereal prices have shot up, with an increase in (corn) prices of almost 40% since June 1," strategists at the CM-CIC brokerage noted.Commerzbank commodity experts said high temperatures and drought around the Black Sea "have resulted in wheat crop shortfalls on a scale that cannot yet be predicted with any accuracy."US commodities analyst, AgResource Company president Dan Basse told the Australian Broadcasting Corporation last week that the Australian harvest could play a role in easing the food shortage."We need every metric tonne of wheat and grain the Australian farmers can produce," Basse said. "Anything that the Australian farmer can do to assure or boost his production should be profitable in the year ahead."Jean-Rene Buisson, head of France's national association of food industries (ANIA) said: "All products based on cereals, including meat, will be affected by price increases, not necessarily by September, but definitely during 2013."In China, food prices are considered politically sensitive and account for up to a third of a consumer's average monthly budget, government statistics show.China has reined in inflation as its economy slows however, while its grain output stood at 1.3 trillion tonnes in the first half of the year, up 2.8% from the same period a year earlier.The Financial Times (FT) said concerns over the US harvest had prompted senior G20 and United Nations officials to consider an emergency meeting on food supply, with a conference call on the issue scheduled for August 27.The newspaper cited officials as saying the talks were not a sign of panic but rather reflected the need to establish a consensus to avoid a repeat of the riots and tensions sparked in 2007-08 by spiking food prices.Major concerns include hoarding or export restrictions by food producing countries, along with panic buying by others.Also crucial is the balance between the use of grain as a direct source of food and its role as animal feed or as a basis for motor fuels.FAO director general Jose Graziano da Silva of Brazil called in the FT for the United States to suspend biofuel production programmes to ease the pressure on food resources."An immediate, temporary suspension" of a mandate to reserve some crops for biofuels "would give some respite to the market and allow more of the (corn) crop to be channelled towards food and feed uses," he wrote.A region where food is in chronic shortage is the Sahel region of Africa, where the number of malnourished children is estimated to have hit a new high of 1.5 million as cholera and locusts emerge as new threats, UNICEF has warned.The relief agency World Vision Australia said 18 million people need food assistance in Niger, Mali, Chad, Mauritania and Senegal.

NEWS,15.07.2012

Hollande says Peugeot must renegotiate layoff plan

French President Francois Hollande says that Peugeot must renegotiate a plan to lay off 8000 workers to lessen its social impact and accused the carmaker of lying over its intentions and making serious strategic errors.In a television interview yesterday, Hollande said a government rescue plan for the ailing car sector due to be announced on July 25 would include public incentives to encourage consumers to purchase French-made, environmentally friendly cars.He ruled out, however, a return to the scrappage subsidies introduced in the 2009 financial crisis by former conservative President Nicolas Sarkozy, which he said had cost the taxpayer dearly and had often been spent on foreign-made vehicles.However, he admitted he could not halt Peugeot's plant to stop production at the Aulnay assembly plant near Paris in 2014.Hollande, who won power in May with a promise to tackle high unemployment and halt France's steady industrial decline, acknowledged Peugeot had economic reasons for making the cuts.The company said last week its manufacturing arm is losing 200 million euros a month."However, the plan in its current condition is not acceptable. It must be renegotiated," Hollande said, adding he wanted to make sure voluntary redundancy packages or new jobs were found for all workers. "We want to open discussions so that there are no straight firings at Peugeot."Peugeot has so far said it will find jobs within the group for 1500 of the workers concerned, with a further 3600 workers offered voluntary redundancy until 2013.The Peugeot announcement came as Hollande faces scrutiny over billions of euros in tax rises to hit a deficit target this year - with the prospect of worse to come in 2013 - and struggles to fulfil a campaign pledge to bring down France's highest unemployment rate in 12 years.The shock announcement from Europe's second-largest carmaker last week revived memories of former Socialist Prime Minister Lionel Jospin's failure to halt Renault's closure of its Vilvoorde plant in Belgium after winning power in 1997.Jospin's admission "the state cannot do everything" is credited with helping to sink his 2002 presidential bid."The state will not stand idly by," Hollande said, asked if his government would follow Jospin's route.Hollande said the government had means of "exerting pressure" and could provide credit to ensure Peugeot stuck to its commitment to see Aulnay remains an industrial site.He dismissed a call from Peugeot Chief Executive Philippe Varin for the state to cut the heavy social charges weighing on labour costs, which the executive said made manufacturing uncompetitive."It's too easy to blame labour costs. There were bad strategic choices," Hollande said."There were delays in taking difficult decisions and shareholders who were too hungry for dividends when investment should have been the priority."Hollande's government has said it will consider steps such as lowering social charges on labour as part of a competitiveness review headed by former EADS Chief Executive Louis Gallois due to be completed in October.That will come too late, however, to defuse the current crisis in the car sector.The president accused Peugeot of misleading public opinion by concealing its plans until after presidential and legislative elections in May and June. A company spokesman declined comment."There was both a lie - this plan was not announced although it was already on the agenda - and a deliberate delay until after the elections," Hollande said.Prime Minister Jean-Marc Ayrault will announce incentives on July 25 for buying French vehicles as part of a package to support the sector, Hollande said."In France, we have an industry which has taken the lead in making clean vehicles and hybrid vehicles. We should make sure these type of vehicles have the advantage," he said.State and regional governments would buy these vehicles to give them a boost, Hollande said, while credit would be made available for research to boost industrial innovation."We will create a plan which costs as little as possible to the taxpayer and is as effective as possible," said Hollande.

 

France's Hollande vows to fight job cuts

President Francois Hollande marked Bastille day celebrations with a pledge to fight industrial layoffs and clean up French politics, after watching troops parade down the Champs Elysees as jets streamed the national colours overhead.The Socialist leader's first National Day since winning office in May was overshadowed by outcry at mass job cuts announced by carmaker Peugeot and a scandal over his private life threatening to undermine his image as "Mr Normal".Reviving the tradition of a July 14 television interview, scrapped by his predecessor Nicolas Sarkozy, Hollande said France had to make an "effort" to restore its public finances but ruled out the kind of painful austerity causing protests in Spain and Italy."My mission is to help France recover and give it a future. Jobs are my priority," Hollande said in the interview at navy headquarters overlooking the historic Place de la Concorde, where thousands went to the guillotine during the Revolution.Hollande, who pledged during his campaign to curb the highest unemployment level in 12 years, faces a major challenge after Peugeot said on Thursday it would axe 8000 jobs in France.Accusing the company's management of strategic errors and misleading the public over its intentions, Hollande said he could not accept the restructuring plan as it stood and promised public incentives to help French-made cars.During the interview he also said he had told his partner, journalist Valerie Trierweiler, and the wife of his four children, Segolene Royal, to end a public spat.The parade - which ended with parachutists landing before the presidential tribune - came as Paris struggles to pare back one of the highest levels of public spending in Western Europe to meet an EU deficit target of 3% of GDP next year.The government announced 7.2 billion euros in new taxes last week to plug a budget shortfall for this year and needs to find 33 billion euros in 2013 to meet its European deficit targets or risk unnerving financial markets."I knew the state of France before I inherited it. I am not going to pretend that I just discovered it," Hollande said.He said the government was looking at a raft of measures to fill the shortfall, including an increase in the CSG social welfare charge recommended by the state auditor this month, which would hit all households."I'm not going to announce today an extra tax for the majority of the French... A rise in the CSG is one of the things under study, among other measures," he said.With his popularity already hit by voters' fears over austerity, Hollande has also had to deal with simmering tensions between his partner, his four children and their mother, Socialist politician Royal.The affair flared this week when Thomas Hollande, his eldest son, told Le Point magazine he and his siblings wanted no contact with Trierweiler after she backed Royal's rival in a legislative election in the western city of La Rochelle in June.Royal said a tweet from Trierweiler in support of her opponent was partly to blame for her losing the seat, fuelling media reports of bitterness between the two women."Private matters should be handled privately and I told those close to me that they should scrupulously respect this principle," Hollande said in Saturday's interview, promising there would be no repeat of the incident, dubbed "tweetgate".Trierweiler sat in a separate tribune from Hollande to watch Saturday's two-hour parade under cloudy Parisian skies in the Place de la Concorde. Thousands of onlookers packed the tree-lined avenue, decked out in France's Tricolour flag, as troops, cavalry and tanks streamed past from the Arc de Triomphe.

 

European Union Working On $120 Billion Spanish Bailout

 

The European Union's bailout fund is working on a (EURO)100 billion ($120 billion) package to prop up Spanish banks, according to a report Saturday by German news weekly Der Spiegel.A confidential draft plan by senior officials at the European Financial Stability Facility proposes an initial (EURO)30 billion payment to Spain at the end of July, the magazine said.Of that, some (EURO)20 billion would go toward shoring up Spanish banks' short-term finances while another (EURO)10 billion would be reserved as a longer-term emergency buffer.Three further payments totaling (EURO)45 billion would be made in November and December of this year, and in June 2013, Der Spiegel said. A Spanish Economy Ministry spokeswoman declined to comment on the report.According to the report, up to (EURO)25 billion would also be made available to create a "bad bank" to buy up hard-to-sell debt.This would be in line with a draft memorandum of understanding agreed by finance ministers from the 17 eurozone countries, which suggests that part of Spain's bank bailout should involve the segregation of billions in problematic assets to an "external asset management agency" to clean up Spanish banks' balance sheets.Investors are becoming increasingly wary of placing money in Spanish banks, which are having to turn to the European Central Bank for financing. In June, Spanish bank borrowing from the ECB rose 17 percent from May. The accrued total as of the end of that month was (EURO)337 billion, 77 percent of all the money owed to the ECB and seven times the figure from June 2011.The government on Friday approved its latest package of measures aimed at cutting (EURO)65 billion ($79 billion) off the budget deficit through 2015, the biggest deficit-reduction plan in recent Spanish history. The sweeping austerity measures include wage cuts and tax increases for a country struggling under a recession and an unemployment rate of near 25 percent.

 

Chavez re-election team reaches out via Twitter

 

Venezuela's verbose Hugo Chavez is offering to send supporters his tweets to their mobile phones as the socialist president fights a vigorous opposition campaign across the Twitter-mad country ahead of an October 7 election.Chavez has had three cancer operations in the last year and his delicate health means he has not been able to travel anywhere near as much as his younger rival, Henrique Capriles.Instead, he has had to focus on making regular state TV appearances - usually for several hours at a time, almost every day of late - and pontificating via his @chavezcandanga Twitter account, which has nearly 3.2 million followers.The president's online persona is an important part of his team's strategy in an election battle that is shaping into the toughest fight of his political life.Spurred by an explosion in Twitter's popularity in Venezuela and annoyed at what he said was the opposition's domination of local electronic media, Chavez began tweeting in early 2010.His account quickly overtook one belonging to Globovision, the main opposition TV station, and he soon said he had needed to hire 200 people to help him read and respond to what he called an "avalanche" of messages from supporters, requests for help, and complaints about faulty services and corruption.Delighted with his cyber success, he even urged Cuba's Fidel Castro and Bolivia's Evo Morales to start tweeting too.The three men are arguably Latin America's most vocal left-wing critics of what they denounce as the US "empire."While the 57-year-old Chavez says he is completely cured of cancer, his recuperation means he has had to watch while Capriles, a 40-year-old former state governor, spent months crisscrossing the OPEC nation on a "house by house" tour.Most opinion polls still give Chavez a double-digit lead, and on Friday he launched a series of campaign events describing his recovery as "a miracle" and seeking to capitalize on the deep emotional ties that even his fiercest critics concede he shares with Venezuela's poor majority.The SMS service was unveiled late on Friday and is aimed at the many Venezuelans who have no easy access to the Web and would like to receive tweets by "el comandante" via SMS message."The initiative will (also) let people without Twitter accounts receive the messages," said state-run news agency AVN.Supporters who register at this Chavez's website can choose to receive his tweets in real time, or avoid being woken up by choosing just those he posts between 7 am and 10 pm. Chavez's number of followers - many of whom must have signed up at least partly out of curiosity about how the former soldier famed for his hours-long speeches works with a 140-character limit - currently puts him at 179th in the world, just behind Jamaican-American hip hop star Sean Kingston.By comparison, the top spot is held by singer Lady Gaga with more than 27 million followers. Capriles, on the other hand, has 1 million - about a third as many as Venezuela's president."Good morning, Patriotic World!" Chavez said in one fairly typical tweet on Saturday, adding that he was on his way to lead what would be another lengthy televised ceremony at a military base in Caracas. "Long live our Soldiers!"