Showing posts with label governments. Show all posts
Showing posts with label governments. Show all posts

Tuesday, May 28, 2013

NEWS,27 AND 28.05.2013



Europe needs a youth jobs plan - govts


Europe must urgently tackle youth unemployment, the French, German and Italian governments said on Tuesday, urging action to rescue an entire generation who fear they will not find jobs.
Ministers called for a mixture of measures including helping small companies and boosting apprenticeships.
Some 7.5 million Europeans aged 15-24 are neither in employment nor in education or training, according to EU data. Youth unemployment in the EU stood at 23.6% in January, more than twice as high as the adult rate.
"We have to rescue an entire generation of young people who are scared. We have the best-educated generation and we are putting them on hold. This is not acceptable," Italian Labour Minister Enrico Giovannini told a conference in Paris.
Germany in particular, weary of a backlash as many in crisis-hit European countries blame it for austerity, has over the past weeks taken steps to tackle unemployment, striking bilateral deals with Spain and Portugal.
Its labour and finance ministers told the conference that, to help young people find jobs, Europe must continue on the path of structural reforms to boost its competitiveness as well as make good use of available EU funds, including €6bn that leaders have set aside for youth employment for 2014-20.
"We need to be more successful in our fight against youth unemployment, otherwise we will lose the battle for Europe's unity," German Finance Minister Wolfgang Schaeuble said.
While Germany insists on the importance of budget consolidation, Schaeuble spoke of the need to preserve Europe's welfare model.
If US welfare standards were introduced in Europe, "we would have revolution, not tomorrow, but on the very same day," Schaeuble told students at the Sciences PO political science institute hosting the conference.
While all agreed on the urgency needed to tackle youth unemployment, ministers offered no concrete plans, insisting Europe must be pragmatic and work on various strands.
Schaeuble said this was why Germany had also decided to strike deals with countries such as Spain and Greece.
"Let's be honest, there is no quick fix, there is no grand plan," said Werner Hoyer, head the European Investment Bank.
Together with ministers, he said policies aimed at boosting youth employment must focus on small and medium-sized enterprises as they are the main entry point to the labour market for most.
More than half of Spain's under 25-year-olds are jobless, as are nearly 40% in Portugal. In Greece, youth unemployment shot to a record 64% in February.
In March 2013, the lowest youth unemployment rates were in Germany and Austria, both below 8%, highlighting the wide disparities within the EU.
The youth employment crisis will be a central theme of a June EU leaders' summit, and German Chancellor Angela Merkel has invited EU labour ministers to a youth unemployment conference in Berlin on July 3.
Following up on an idea aired earlier this month, French President Francois Hollande urged the euro zone to work towards a joint economic government with its own budget which could take on specific projects including tackling youth unemployment.

Bashir threatens to cut South Sudan oil


Sudanese President Omar al-Bashir warned on Monday he will order the flow of oil from South Sudan to be cut off if Juba provides assistance to rebels in South Kordofan and Darfur.
Bashir said he would "completely close the pipeline" that carries oil from South Sudan to ports on Sudan's Red Sea coast.
He was speaking at a ceremony after the army recaptured Abu Kershola town in the far north of oil-rich South Kordofan, which rebels seized a month ago.
In March Sudan and South Sudan, which split from Khartoum in July 2011, signed detailed timetables to resume the flow of South Sudan oil through a major pipeline in the north that runs to a port on the Red Sea, and eight other pacts to normalise relations.
Bashir said on Monday that all of the nine agreements must be respected.
"Failure to abide by any agreement will nullify the nine accords," he said.
Bashir's remarks come less than a month after the Khartoum government announced that South Sudanese petroleum had returned to Sudan's main Heglig facility.
Heglig, along the disputed border with South Sudan, is where the export pipeline begins a journey of about 1 500 kilometres (930 miles) to the Port Sudan terminal on the Red Sea.
The pipeline will carry oil that will bring billions of dollars in revenue to both impoverished nations once exports resume.
But Khartoum accuses South Sudan of backing rebels fighting in South Kordofan and Blue Nile states as well as in Darfur claims which Juba denies.
Gibril Adam, a spokesperson for the rebels, said the fighters pulled out of Abu Kershola to ease a government blockade on the town that was taking its toll on residents there.

Crisis-hit Italians swap cars for bikes


Bikes are outselling cars in cash-strapped Italy, but while cyclists in Milan say their city is ready for a two-wheel lifestyle, there are daily nuisances for riders on Rome's busy streets.
Some cities in Italy have bike-sharing initiatives, bike paths and public awareness schemes, while cyclists are still barely tolerated in others.
Giulietta Pagliaccio, head of the Italian Federation of Friends of the Bicycle, said: "The economic crisis has had repercussions for everyone, including in transport.
"There's been a small revolution in terms of lifestyle.
"We have seen a lot of people who have re-discovered this means of transport because it's ease, it's simplicity, its speed for short distances... " she said.
There were 2 000 more bicycles sold than cars in Italy in 2011 - a differential that rose to more than 200 000 units last year, according to figures from an association of biking businesses and the transport ministry.
The car sector has been hit by what the head of auto giant Fiat, Sergio Marchionne, dubs "Carmageddon" - with a 20% drop in sales in 2012.
Pagliaccio said Rome was a particularly "difficult" city for cyclists and that in general conditions were worse in the southern half of the country, with poorer quality roads and few bicycle paths.
Benefits
She said mentalities were beginning to change, except for a few motor die-hards "who would drive from their bedroom to the kitchen if they could" - but that politicians remained "very behind" in terms of bike-friendly policies.
"They are afraid of losing votes.
"It's terrifying since everything is done in this perspective, without a long-term urban vision," she said.
Piero Nigrelli, head of bicycles of an association of biking businesses, said it was "breathtaking to what point politicians lack awareness of the bicycle's value".
He said Germany boasts about seven million cycling tourists a year who generate €9bn in turnover and only "a modest investment in bike paths" would be needed to bring such benefits to Italy.
In the Italian capital, those who use existing routes complain of daily trials, from junk strewn across the paths, to stretches along the riverbank which periodically flood and in one case a path blocked by a sprawling Roma camp.
Famed for its annual Giro d'Italia bike race, Italy has yet to embrace bicycles as a form of transport, though a "Bikemi" bike-sharing scheme in Milan has been enthusiastically received by locals and sales in foldable models are on the up.
Specialist shops in the economic capital have begun stocking bikes specifically designed for urban life, such as the British Brompton model, which folds up neatly and has a handle so it can be pulled along like a suitcase.
The world's oldest bicycle-making company, Bianchi, famed for kitting out biking champions such as Fausto Coppi, has branched out into electric bicycles to meet a growing demand from Italians keen to swap four wheels for two.
"Customers are asking now for high-range commuter models...they are looking for a long-term investment that supports the idea that they are turning away from the car," said Bob Ippolito, head of Bianchi.
Commuter bikes are now the company's fastest selling models - up 35% last year - which is partly because some customers "instead of having two cars, now prefer to have a car and a bicycle", he said.

Romanians protest shale gas plans


Thousands of Romanians protested on Monday against plans by the US company Chevron to explore for shale gas in eastern Romania.
"I have three children and I want them to grow up within a safe environment with clean water. Exploring for shale gas threatens to contaminate ground water," Alina Secrieru, a 39-year old nurse from the Barlad region told AFP.
"No fracking", "Chevron go home", "We say no to shale gas", read some of the banners carried by protesters who came from Barlad and surrounding villages.
Chevron obtained a vast concession in this poor and rural area of Romania to prospect for shale gas.
"This area survives on agriculture. If our water gets contaminated by the extraction of shale gas, agriculture will die and this area as well," said Constantin, a water specialist who was among the protesters.
He refused to give his last name out of fear of losing his job as most of the local politicians are now defending shale gas drilling.
Chevron has said in the past that all its activities "have, and will continue to be conducted in compliance with Romanian laws, EU requirements and stringent industry standards."
Shale gas drilling has fuelled controversy around the world.
The technique to extract the gas, hydraulic fraction or fracking, has been banned in countries such as France and Bulgaria but is widely used in some US states.
Fracking is a process whereby liquid products, including water and chemicals, are pumped deep into oil or gas-bearing rock to cause fractures and release the hydrocarbons.
Environmentalists say the method poses serious threats that include contaminating ground water and triggering earthquakes.
Romania together with Britain, Hungary, Poland and Spain strongly pleaded for developing shale energy during the last European council on energy.
Protesters lashed at centre-left Prime Minister Victor Ponta, accusing him of flip-flopping on his position against shale gas.
Ponta, in power since May 2012, had slammed the previous government's decision to grant Chevron and other oil groups concessions to prospect for shale gas.
His government last year adopted a moratorium on drilling, putting Chevron's operations on hold.
But since the moratorium expired in December, Ponta said he was in favour of exploration.
"Politicians have let us down but we want to remind them that the people in this area are against the exploration of shale gas. People here care about their environment" said Lulu Finaru, a notary who helped organise the protest.
A US Energy Information Administration study said the joint reserves for Romania, Bulgaria and Hungary were around 538 billion cubic metres (19 trillion cubic feet), among the biggest in eastern Europe.

China 'steals' Australia spy agency plans


Chinese hackers have stolen top-secret blueprints to Australia's new intelligence agency headquarters, a report said on Tuesday, but Foreign Minister Bob Carr insisted ties with Beijing would not be hurt.

The Australian Broadcasting Corporation said the documents taken in the cyber hit included cabling layouts for the huge building's security and communications systems, its floor plan, and its server locations.

Carr said the government was "very alive" to the threat of cyber attacks on national security, adding that "nothing that is being speculated about takes us by surprise".

But he refused to confirm or deny
China was behind the attack.

"I won't comment on whether the Chinese have done what is being alleged or not," he said.

"I won't comment on matters of intelligence and security for the obvious reason: We don't want to share with the world and potential aggressors what we know about what they might be doing, and how they might be doing it."

'Enormous areas of co-operation'

While
Australia has a long-standing military alliance with the United States, China is its largest trading partner and the two countries have been forging closer ties.

Carr insisted that the relationship would not be damaged by the allegations, which follow several other hacking attacks on government facilities in the past two years.

"It's got absolutely no implications for a strategic partnership," he said. "We have enormous areas of co-operation with
China."

The revelations saw
Canberra came under pressure to launch an independent inquiry into the "sorry saga" by opposition politicians, but Prime Minister Julia Gillard declined to comment on "these unsubstantiated reports".

The state broadcaster's investigative
Four Corners programme said the attack on a contractor involved with building the new Canberra headquarters of the Australian Security Intelligence Organisation was traced to a server in China.

It cited security experts as saying the theft exposed the agency to being spied on and may be the reason for a cost blowout and delays to the opening of the building, which was supposed to be operational last month.

Deepening concern

Des Ball, from the
Australian National University's Strategic and Defence Studies Centre, said the blueprints would show which rooms were likely to be used for sensitive conversations, and how to put devices into the walls.

"Once you get those building plans you can start constructing your own wiring diagrams, where the linkages are through telephone connections, through wi-fi connections," he was quoted as saying.

The report, which did not say when the alleged theft took place, comes amid deepening concern about aggressive state-sponsored hacking by
China.

In 2011, the computers of
Australia's prime minister, foreign minister and defence minister were all suspected of being hacked, with the attacks reportedly originating in China.

At the time,
Canberra said cyber attacks had become so frequent that government and private networks were under "continuous threat".

Beijing dismissed the allegations as "groundless and made out of ulterior purposes".

Earlier this year, computer networks at the Reserve Bank of
Australia were hacked, with some said to be infected by Chinese-developed malware searching for sensitive information.

This followed Chinese telecoms giant Huawei being barred in 2012 from bidding for contracts on
Australia's ambitious $35bn broadband rollout due to fears of cyber attacks.

N Korea kidnap numbers 'much higher'


The number of Japanese people kidnapped by North Korea decades ago to train its spies may be far higher than previously thought, a report said on Tuesday, citing a former Pyongyang agent.

Between 1965 and
1985, a team of around 120 North Korean troops repeatedly abducted young Japanese fishermen, the conservative Sankei Shimbun reported, citing a government interview with a formerly high ranking North Korean military official.

One of the missions involved the snatching of a man in his 30s from a boat in waters off
Aomori prefecture in northern Japan, the report said. The vessel and its remaining four crew members were sunk, it said.

The issue of Japanese kidnapped by
North Korea is a running sore in relations between the two countries.

Pyongyang admitted in 2002 its agents had snatched some young Japanese in what Tokyo said was an operation to train spies in Japanese language and customs.

Following a summit between then-prime minister Junichiro Koizumi and Kim Jong-Il, the late North Korean leader, five of those who were taken were allowed to return to
Japan, along with their Korea-born offspring.

Pyongyang insisted at the time that all the others had died.

‘Acts of terrorism’

But suspicions persist in
Japan that the isolated state has not come clean about the scope of its abductions and the issue colours all of Tokyo's dealings on North Korea.

Asked about the report, Keiji Furuya, the state minister in charge of the kidnap issue, declined to comment, saying he could not give specifics about what the government discovered.

Japanese officials say they believe many of the hostages are still alive, and say the kidnapping of at least 17 nationals during the 1970s and 1980s - some of whom were as young as 13 - were "acts of terrorism"

The Sankei report on Tuesday, which did not name the defector or say where the interview with him took place, comes as Japan has struck out alone to re-engage with North Korea.

Earlier this month a top aide to Prime Minister Shinzo Abe visited
Pyongyang in a move that appeared to take Washington and Seoul by surprise.

The US and South Korea have pushed for North Korea to re-join a six-party forum, which also involves Japan, China and Russia.

Those talks, which were derailed by nuclear and missile tests that began at the end of 2012, are aimed at curbing
North Korea's atomic ambitions.

But despite the keen threat felt by
Tokyo, which lies within easy reach of North Korean weaponry, the kidnapping issue trumps all others because of its domestic resonance.

Japan would not resume aid to even a completely de-fanged North Korea unless all abduction cases have been settled, Furuya said earlier this month.





Saturday, January 19, 2013

NEWS,19.1.2013



Obama kicks off inauguration weekend


President Barack Obama on Saturday was heading up a national day of service, kicking off a whirlwind weekend of inauguration events that mark the end of his historic first term and the start of his second. Obama added the day of service projects in 2009 and hopes it will become a tradition for future presidents. He and first lady Michelle Obama planned to volunteer in the Washington area, as did Vice President Joe Biden and his wife, Jill.The president will be officially sworn in for his second term on Sunday in a small ceremony at the White House. He'll take the oath of office again on Monday before hundreds of thousands of people on the National Mall, followed by the traditional parade and formal balls. Thousands of workers and volunteers were making final preparations for the celebration. Hotels and government buildings along the parade route were adorned with red, white and blue bunting. White tents, trailers and generators lined the Mall.Yet there is decidedly less energy surrounding Obama's second inauguration than there was in 2009. That history-making event drew 1.8 million people for the swearing-in of the nation's first black president. This time, Obama takes the oath of office following a bruising presidential campaign and four years of partisan fighting. He's more experienced in the ways of Washington. He has the gray hair and lower approval ratings to show for it.For at least the inauguration weekend, the fiscal fights and legislative wrangling will be put aside in favour of pomp and circumstance.The White House did not say in advance what Obama's service project would be. In 2009, he helped spruce up a shelter for homeless teens in one of Washington's porter neighbourhoods then visited wounded soldiers at Walter Reed Army Medical Centre.In an effort to expand the day of service, former first daughter Chelsea Clinton was headlining a volunteer summit on the Mall. The inaugural committee organised volunteer events in all 50 states.


The Re-emergence of Europe: Why Exiting the Euro Is a Bad Idea


At the height of Europe's debt and banking crisis it seemed temptingly easy to simply jettison the euro altogether and opt for national devaluation. Sometimes, if a country's currency is overvalued in real terms and it looks like the current account is going to be in deficit for the foreseeable future, devaluation can make sense. But the fallacy put about was that this process would be relatively easy and could be done without too much collateral damage to the rest of Europe. This fallacy only served to exacerbate the crisis in 2010 and 2011, creating unnecessary, time-wasting and distracting noise around the policy options. An overwhelming number of economists, international civil servants and policy-makers argue that a fragmentation of the Eurozone would cause a new depression and massive wealth destruction around the world. It would also end the period of economic integration that has characterized world politics since the end of the Cold War. All banks that have looked at the implications of a euro break-up reach roughly similar conclusions. For example, Swiss bank UBS estimates that it would cost each southern European economy up to 40 percent of their gross domestic product (GDP) in the first year. And ING predicts that the Eurozone as a whole, including Germany, could see a 9 percent drop in GDP in the first year following break-up. In short, the cost of devaluation would far exceed the supposed benefits. Here is why:If even one country, large or small, were to leave the euro, the Eurozone would effectively rupture. The important founding notion of solidarity would be broken. Old rivalries could be reignited. If a highly productive economy such as Germany were to exit, it would mark the end of a 60-year commitment to a stable Europe. If a less productive economy exited, it would almost instantly become a pariah, exporting its pain to its neighbours.Switching back to an old currency would also be a technical challenge and have to be done quickly. Who would set the exchange rate? New coins would have to be minted, new currency printed and new interest rates set by the central bank. Everything that was paid in euros from national debt to teachers' salaries would have to be switched back as quickly as possible to avoid financial chaos. Unravelling a system that took three years to put in place would be much harder than people think. There would probably be a run on the banks, as depositors stampeded to withdraw their money, fearing for the value of their savings. Governments would be forced to impose withdrawal limits. Legal challenges and a likely credit crunch would follow, if Argentina's forced devaluation in 2002 is anything to go by. Investors would sell off assets and dump the country's bonds.In addition, the government would almost certainly default on its foreign euro-denominated debt, leading to possible bank collapses at home and across the rest of Europe; such is the interdependence of the banking system. Access to international capital markets would be denied possibly for years forcing the country to bring its budget into balance immediately. The one potential advantage is that its debt, now redenominated in the new currency, might be significantly lower. But while a devalued currency might make exports cheaper and therefore more attractive to foreign buyers, imports would become more expensive and cause a decrease in real incomes. It may improve the current account position temporarily, but it will not necessarily lead to longer term growth. Devaluation does not address the fundamentals of competitiveness. Restructuring the economy over the long term cannot be avoided.Apart from all this, there is no legal framework for a member country to re-establish its own currency or for one member to expel another. Leaving would have far-reaching implications for a country's politics, finances, economy, society and future.


Maduro active in Chavez's absence



Venezuela's vice president stepped into the shoes of ailing President Hugo Chavez in a flurry of public events on Friday, working to maintain an image of government continuity after more than five weeks of unprecedented silence from the normally garrulous president.Vice President Nicolas Maduro and other Cabinet ministers have striven to assure a nervous public that Chavez's administration is firmly in charge even as the opposition challenges its legitimacy. Chavez has been out of sight in Cuba since undergoing cancer surgery on December 11.Among three televised events held nationwide on Friday, Maduro helped opened a school in Chavez's home state of Barinas alongside the president's elder brother, Adan, who is the state's governor."We're all Chavez. We have to feel that way," Maduro said during the school visit. "We all love Chavez from our hearts."The vice president, whom Chavez designated last month as his chosen successor, also visited an agricultural training centre in Lara state, where he insisted on the importance of "socialist efficiency". He then spoke to National Guard troops in western Zulia state, blaming materialistic values for exacerbating crime. A day earlier on Thursday, Maduro presided over the inauguration of a housing project in Caracas.Oil Minister Rafael Ramirez gave an update on the government's efforts to build new public housing for the poor, saying more than 400 000 homes are currently under construction nationwide. "All the programmes of the revolution continue and will continue," Ramirez told reporters on Friday. "The revolutionary government hasn't stopped, not one minute. "Opposition leaders have said the government violated the constitution by indefinitely postponing Chavez's swearing-in past January 10, a stance that has been dismissed in a ruling by the Supreme Court. Meanwhile, a president known for speaking and singing on television for hours at a time has not uttered a word or appeared on television since December 10. Even his popular and normally busy Twitter account has gone dark since early November. Maduro and other government leaders don't enjoy anywhere near the level of public adoration that Chavez does, but the president's followers have still embraced him as his anointed stand-ins. Critics note that while many Venezuelans remain on edge awaiting news of Chavez's condition, the government faces serious challenges ahead. The opposition newspaper Tal Cual headlined an editorial by journalist Fernando Rodriguez on Monday saying Venezuela is now a "headless country"."Who's in charge in this country?" Rodriguez asked. He noted that Venezuela is being battered by 20 percent inflation, shortages of some types of food and that hundreds were murdered last month during the holidays.Rodriguez wrote that as he sees it, "The country is standing still."

Thursday, November 29, 2012

NEWS,29.11.2012



The Politics of Fear


To those who were surprised that the European Union received the Nobel Peace Prize, I say: "Think twice." This was not only a deserved award for Europe's contribution to bringing peace and stabilizing democracies in the recent past  the Nobel Committee was also sending a clear warning to contemporary leaders. I could almost hear them saying: "On this difficult odyssey, don't abandon ship. In today's world, the EU is too valuable to squander."It was an indirect but powerful rebuttal to the dangerous nationalist and populist rhetoric some politicians have adopted when describing the recent financial crisis.This message couldn't have come at a better time.Like ghosts from the past, we see political violence, xenophobia, migrants being scapegoated and extreme nationalism creeping into our public debates even into our parliaments. This is a Europe diverging from its founding principles. Principles that rendered nationalistic hatreds an anathema.But it is these politics of fear that seem to have incapacitated Europe. A Europe seemingly incapable of ending this crisis, a fractious Europe. This has undermined a sense of trust between us and in our European institutions. This climate does not inspire confidence either in our citizens or the markets. Nor will our retreat into a renationalization of Europe be the solution.My recent experience in dealing with the financial crisis in Greece and in Europe has confirmed my belief that this is a political crisis more than a financial one.I am convinced that, with the political will, we could have avoided much pain, squelched market fears and stabilized the euro, while at the same time reformed ailing, unsustainable economies such as ours in Greece. Despite media hype to the contrary, it is the Greek people who first and foremost have wanted this change. Instead, we allowed fear and mistrust to overcome us. And fear begets more fear and uncertainty. Instead of understanding, we have name-calling. Instead of collective, transparent action by our institutions, we have moved into a mode where the community method is undermined by makeshift intergovernmental decision-making, with the balance of power tipping dangerously towards the very large member states. Instead of real, necessary reform and fiscal responsibility, we are implementing an overdose of austerity dealing more with symptoms and less with the root causes of the economic woes of Europe. Instead of rewarding superhuman efforts, we are condemned for our shortcomings. More than anything else, it has been this political climate that has undermined our common efforts to deal with today's financial crisis. Whether it is banks or governments, we have adopted a passive, almost defeatist, attitude, which we cloak in the language of "caution and responsibility. "It is our responsibility to break this cycle of fear and mistrust now. We are vastly underestimating our own capacities as a union. Our capacity to calm markets or create jobs. We again need to believe in the great capacity of our peoples north and south, west and east. We must rekindle the spirit that united us in 1989 when the Berlin Wall fell. We know the difficulties we then faced. But we did not cower. We decided to invest in the potential Europe and our peoples had. And there is so much hidden or untapped potential in our youth, our experience, our diversity and our cultures.But this not simply an issue of political will. We must combine this will with an understanding of our real weaknesses. Over the decades we have become more and more interdependent in Europe. This was not by chance, this was by design -- from the days of Monnet and Schuman. It is this interdependence that has made the wars of the past unthinkable.But if interdependence is important to keep the peace, it is not enough to make us effective, adaptive, powerful on the global scene. Neither does interdependence guarantee the democratic empowerment of our citizens and the liberation of our peoples' potential.In fact, this interdependence today is seen by many as a straight jacket, hindering us rather than giving us the capacity to deal with new global challenges. The debate about the breakup of the euro, or even euro-exits, is a case in point.Our citizens, therefore, wonder whether this European structure is still useful or if we should go our own separate, independent ways. As in The Odyssey, the sirens are beckoning that we change course. However sweet their song, we know their purpose is that we crash on the shallow rocks. If we are to avoid these rocks, we need to radically rethink our governance structures and policy responses so that we capitalize on our strengths and neutralize our weaknesses.Three fundamental principles must underpin a more progressive Europe.First, we must strengthen Europe's institutional capacity. Priority today must be in the financial-economic sphere. The eurozone is the world's largest economy, the euro is the world's second reserve currency and on aggregate we have strong economic fundamentals; but we are not able to leverage our strengths due to weak or missing institutions. Despite significant progress such as:

- More robust fiscal monitoring;
- The European Stability Mechanism;
- The Six-Pack to strengthen governance and oversight; and
- A broader mandate for the European Central Bank, with the recent introduction of Outright
Monetary Transactions, we must go one step further. 


We have already pooled our risks, now we must pool our strengths. Eurobonds and a federal banking union are vital tools to safeguard the EU from similar crises and set our economy on a more stable footing. Second, we need to liberate and reenergize Europe's human capacity. High unemployment needs to be offset by investment in our human capital, education, research, green growth and the necessary infrastructure for green energy and a knowledge society. In our race towards competitiveness, we are emulating models that have little to do with our traditions. In many emerging markets, a lack of collective bargaining and democratic accountability, low wages, substandard working conditions and denigration of the environment combined with tax havens which have robbed countries of huge revenues up to 11 billion euros per year in Greece alone may offer a temporary comparative advantage. But in seeking growth, we cannot race to the bottom. We must base our competitiveness on quality, not inequality. Third, we must strengthen our democratic capacity. We need innovative democratic institutions that will empower our citizens and strengthen the legitimacy of our decisions .The EU's complex decision-making process has been an outcome of a delicate historical balance between member states. Today, however, people feel they are sidelined by these decisions. In trying to confront its fiscal deficit, Europe has run up a democratic deficit. As we take the next steps towards European integration, we must give ownership of this process to the people. Policies imposed on citizens without their active consent are doomed to fail. Already, a frustrated, educated but unemployed younger generation is losing faith in our European institutions and values. This vacuum has created fertile ground for populism and extremism. When our citizens feel disempowered, they will turn to saviors or target scapegoats as they do not participate through dialogue and responsible deliberation to understand and solve common problems. Europe can regain the confidence of the markets, but first we must regain the confidence of our citizens. That is why I called for a referendum in Greece, so that people could debate and decide on their own future. There is nothing wrong with European countries ceding sovereignty in the interest of creating a stronger Europe. Indeed, they already have. But as we do so, we need to rethink how our representatives in the Union are elected and how decisions are made. An EU president, elected by a European Parliament (or even a directly elected president), European-wide referenda, forms of more direct citizen participation and the use of social media are ideas already ripe to explore. This new Europe, as I see it, will not be the product of one grandiose decision, dictated by an elite minority of powerful nations or some anonymous bureaucrats in Brussels. Small, incremental but complementary steps -made by each of us individually and all of us together -will build the values and the foundations for the Europe that we want. Democracy and education will give new capacity to our citizens and that, in the end, will empower Europe and reinforce its legitimacy in our societies and around the world. We do have a choice. Either we empower Europe and its citizens and become a catalyst for humanizing our global economy, or globalization will dehumanize our societies and undermine the European project. As a citizen of Europe, I vote for the first choice.

 

EU outlines stop-gap 2013 budget


European Union negotiators have provisionally agreed to fix the bloc's spending at nearly 133 billion euros ($209 billion) in 2013, as part of a deal that adds 6 billion euros to spending this year.The agreement which must now be approved by EU governments and the European Parliament ensures stable funding for EU programmes next year.It also guarantees the continuation of several employment, education and research programmes this year that had been threatened with cancellation because of a funding gap."There was an agreement on the draft package for the 2013 budget that will be submitted to the European Council and Parliament in the coming days," a spokesman for the European Commission said in a statement.But one EU official warned that the approval of governments and lawmakers was far from guaranteed. "I'm not sure that everyone is going to be happy with this package, particularly among some MEPs," said the official, speaking on condition of anonymity. A successful conclusion to the 2013 budget row would allow governments and officials to focus on the far thornier subject of the bloc's next long-term budget, for 2014-2020.EU leaders failed to reach a deal on that 1 trillion euro ($1.57 trillion) budget at a summit in Brussels last week, and are expected to try again early next year.As part of Thursday's deal, EU payments next year will be limited to a maximum of 132.84 billion euros ($US208.97 billion).That would have represented an increase of 2.9% compared with this year far below the rise of 6.8%demanded by the European Parliament and the executive Commission, and only a small real increase after inflation is taken into account. But the extra 6 billion euros agreed for this year means that spending in 2012 will now amount to 135 billion euros the highest level ever and as a result, the budget will actually fall by 1.6% next year. During previous rounds of talks, the Commission had insisted that an extra 9 billion euros was needed to fill the 2012 funding shortfall. But at Thursday's meeting, the EU's executive said it could forgo some of the extra funds while it checked whether all the conditions for payment had been met.About three-quarters of the EU's annual budget is spent on farm subsidies and funding for new motorways, bridges and other public infrastructure projects in poorer eastern and southern European member countries.

BoE urges UK banks to boost capital


British banks need to act now to bolster their defences against financial shocks, as many have underestimated the cost of loans going sour and future fines for misconduct, the Bank of England (BoE) has said.Underlining a growing sense of urgency about capital defences, outgoing BoE Governor Mervyn King said that while the problem was "manageable", he wanted the banks' regulator to report back by March on what steps banks were taking, and warned that he did not want them to cut lending."Our primary concern has been to ensure that UK banks have sufficient capital ... so that they are on a solid footing to support economic growth," King told a news conference."The problem is manageable, and is already understood at least in part by markets. But it does warrant immediate action," he added.King made the comments as he presented the half-yearly report by the BoE's Financial Policy Committee, which from next year will take charge of British bank regulation.He said that the government would not need to put extra money into Royal Bank of Scotland or Lloyds Banking Group, the two banks in which it has held controlling stakes since the financial crisis. Instead, he said banks could raise funds by issuing contingent debt that converts into equity in a crisis, or by restructuring actions - often a euphemism for asset sales. The BoE said that British banks' true capital position was probably worse than relatively healthy official numbers imply, and this was already hurting investors. "Progress by banks in raising capital has slowed and investor confidence remains low," the BoE said in its half-yearly Financial Stability Report. "Market concerns are likely to reflect in part uncertainty about bank capital adequacy."he BoE has repeatedly urged British banks to raise capital levels, and November's report marks a stepping up of these recommendations, despite a slight reduction in the risks facing the financial system due to an easing in euro zone tensions. "UK banks' capital buffers, available to cushion losses and maintain the supply of credit following realisation of a stress scenario, are not as great as headline regulatory capital ratios imply," it said.King also confirmed the new effort would apply to international banks with British subsidiaries which are regulated by the Financial Services Authority.The BoE identified three main areas where banks were over-optimistic about how much capital they had.First, information from supervisors suggested some British banks would suffer bigger losses on loans than they had made provision for, according to the report.Second, it said banks had also persistently underestimated the scale of fines they would face for past misconduct, adding that external analysts had suggested further costs of 4 billion to 10 billion pounds ($7.8 billion to $31 billion) for missold payment protection insurance and the LIBOR rate-rigging scandal. Finally, the BoE criticised the "complex and opaque" system banks use to calculate the riskiness of its assets, with the amount of capital that banks estimated they needed sometimes varying threefold between banks for the same type of assets.The report also revealed muted results from the BoE's June effort to get banks to boost lending, by paving the way for up to 500 billion pounds of liquidity reserves held by the banks to be run down.But it noted that just 31 billion pounds had been released and that it was mostly used to repay debt rather than provide direct support to credit growth.The BoE cautioned that it was "too early" to judge the impact of the initiative.

US stocks and euro sell-off on Boehner comments


US stocks and the euro sold off after US House Speaker John Boehner said there had been "no substantive progress" in talks to avoid the fiscal cliff.Republican Boehner made the comments after speaking with President Barack Obama and Treasury Secretary Timothy Geithner, saying there was a real danger no agreement would be reached to avoid $US607 billion of automatic tax increases and spending cuts that kick in on January 1. Democrats had "yet to get serious about spending cuts," Boehner said.There was no mention of the optimism he cited 24 hours ago that gave a boost to Wall Street and was echoed around the globe.The Congressional Budget Office has warned that falling off the fiscal cliff could drive the US jobless rate back up to 9.1% by the end of 2013 and send the world's biggest economy back into recession.The dollar pared its decline against the euro, which traded recently at $US1.2967, having early touched $US1.30.US stocks did recover some ground after the selloff.The Dow Jones Industrial Average was up 0.2% and the Standard & Poor's 500 Index up 0.4%."One minute the portents for a deal on the fiscal cliff are negative, the next minute they are positive," Mike Mason, a senior trader at Sucden Financial Private Clients in London, told Reuters."This is likely to be the pattern all the way up to the deadline on January 1. Equities are sure to remain volatile and trading subdued until there is any concrete outcome to these negotiations."Economic data in the US was mixed, though the revised reading for gross domestic product in the third quarter was 2.7%, up from the 2% pace previously published.That just missed the estimate in a Bloomberg survey of 2.8% and marks an acceleration from the second quarter's 1.3% growth.Consumers, though, were subdued. Household spending rose a revised 1.4%, down from the first reading of 2%, according to the Commerce Department. Economists were hoping the revision would only be down to 1.9%.Yet the US trade deficit shrank for revised to US$US403 billion from an initial estimate of $US413.7 billion and inventories turned positive.And an index of pending home resales beat estimates by rising 5.2%, according to the National Association of Realtors, while the number of Americans applying for jobless benefits fell 23,000 to 393,000 last week, according to the US Labor Department.Stocks in the UK rallied, as did equity markets across Europe, which closed before Boehner made gloomier noises about the US fiscal cliff.The FTSE 100 advanced 1.2%, with Rio Tinto up 5.1%. Germany's DAX 30 climbed 0.8% and France's CAC 40 was up 1.5%.In the UK, Lord JusticeLeveson's long-awaited report into media ethics that followed the phone hacking scandal at Rupert Murdoch's News Corp called for a new independent media regulator to stamp out unethical behaviour.UK Prime Minister David Cameron, who himself was tarnished by associations with Murdoch's lieutenants in Britain, have a tepid welcome to the report while saying he wouldn't support new law to enshrine such a body.


Tuesday, October 2, 2012

NEWS,02.10.2012



One step forward, two back for Greece on debt


Every step Greece takes to shore up its finances seems to make it harder for Athens to make the numbers add up in the long-term, especially when it comes to its spiralling debt.Monday's 2013 budget plan contained some positive news - for example, the expectation that Greece will have a primary budget surplus, before debt financing costs, for the first time since 2002 - as well as some more alarming forecasts.Chief among those was an acknowledgement that the economy will shrink again next year, by 3.8%, the sixth annual contraction in succession, and that the debt-to-GDP ratio will rise to 179.3% in 2013, a dauntingly high figure.The bottom line is that Greece is in a worse state now than even the most pessimistic forecast just six months ago.The relationship between growth and debt is the focus of the European Commission, the European Central Bank and the International Monetary Fund - the troika of inspectors currently in Athens poring over the government's projections.In the coming 4-6 weeks, the troika will publish its latest report assessing whether Greece's debt is sustainable in the longer-term, something many private sector economists have already concluded is not the case.In its last analysis published in March, the troika said Greece needed to get its debts down to 120% of GDP by 2020 for the situation to be manageable and concluded the goal was achievable under certain optimistic assumptions.But as so often with the Greek economy in the past three years, most of the assumptions are already way off-target and the likelihood of Athens meeting the 2020 goal is now even slimmer than it was then.That makes it all the more likely that Athens will have to go through another debt restructuring, involving further losses for bondholders, if it is to return to solvency. And this time it is the official sector - mostly European governments and their taxpayers - who will have to take a hit rather than the private sector.That would be a major blow to German Chancellor Angela Merkel, whose country is the biggest contributor to euro zone rescue funds, and diplomats say she would be eager to avoid such an event before a September 2013 German general election."Debt reduction will still require a herculean domestic fiscal adjustment," JP Morgan said in an analysis of Greece's deteriorating debt predicament back in July."The upshot of this arrangement is that the inevitable decisions on burden-sharing that lie ahead will relate to official creditors and Greek citizens," it said, noting 70% of Greek debt would be in official sector hands by 2014."Ugly picture" Perhaps the clearest illustration of how far Greece has strayed in the past six months - during which time it has held two elections and so far failed to push through the legislation needed to cut spending and raise revenue - is set out in black and white in the troika's 10-page analysis from March.In that report, written just after private investors took a 70% writedown on their Greek bond portfolios, the EU/IMF inspectors said they expected public debt to peak at 170% of GDP in 2014 under a worst-case scenario.Wisely, they added a proviso: "The debt trajectory is extremely sensitive to programme delays, suggesting that the programme could be accident prone, where sustainability could come into question."Indeed, the debt next year is now forecast to be 10 percentage points higher than even the worst-case figure, and could go on rising in 2014, depending on whether grow returns."It's an extremely ugly picture," said an EU economic adviser responsible for coming up with solutions to the crisis."The truth is, everyone knows Greece needs another debt restructuring but no one wants to acknowledge it right now because the contagion impact remains."A further concern is that even if Greece were magically to get its debt down to 120 percent of GDP by 2020 - an adjustment of around 120 billion euros in seven years - there is no hard-and-fast rule that says it will then be sustainable.For some countries with low growth, a debt level of 90% of GDP is hard to sustain. Others, such as Japan, can survive with debts approaching 200% of GDP."When it comes to Greece, we just used 120% because that's where Italy's debt level was at the time and Italy had managed to sustain it," an EU official closely familiar with the troika's work


Sanctions failing to halt Iran: Israel

 

International sanctions against Iran are biting but are not slowing the country's nuclear programme, Israel's strategic affairs minister Moshe Yaalon said on Tuesday."The sanctions and the pressure in place against Iran for around the past two years are effective, but the centrifuges continue to turn," Yaalon told Israeli public radio."There is a sanctions clock, and the Iranian nuclear programme is getting closer and closer to the red line," he added."We think it is necessary to impose harsh sanctions, economic, political or otherwise, against Iran, and we retain the military option," Yaalon said."But the fact is that diplomacy is not working and the sanctions have not had the desired effect because Iran is continuing its nuclear programme."Israel, the Middle East's sole if undeclared nuclear power, and much of the international community, believe Iran's nuclear programme masks a weapons drive Tehran says the programme is for peaceful energy and medical purposes, but has been slammed with increasingly harsh sanctions that have squeezed the country's economy.On Monday, Iran's currency plummeted at least 17% in trading, prompting the US State Department to describe the freefall as evidence that sanctions were putting pressure on the Iranian government."From our perspective this speaks to the unrelenting and increasingly successful international pressure that we are all bringing to bear on the Iranian economy. It's under incredible strain," State Department spokesperson Victoria Nuland said.



Russia tells Nato to stay away from Syria


Russia told Nato and world powers on Tuesday they should not seek ways to intervene in Syria's civil war or set up buffer zones between rebels and government forces.Moscow further called for restraint between Nato-member Turkey and Syria, where violence along their shared border has strained relations between the former allies.Tensions have flared since a mortar round fired from inside Syria struck the territory of Turkey. Ankara has threatened to respond if the strike were repeated.When asked by Interfax if Moscow worried whether the tense border situation could prompt Nato to intervene to defend Turkey, its easternmost member, Deputy Foreign Minister Gennady Gatilov warned against any such step."In our contacts with partners in Nato and in the region, we are calling on them not to seek pretexts for carrying out a military scenario or to introduce initiatives such as humanitarian corridors or buffer zones." Turkish Prime Minister Tayyip Erdogan, one of Assad's most caustic critics, recently lashed out at Russia for blocking efforts at the UN Security Council to exert pressure on Assad and said Moscow's stance allowed massacres in Syria to continue.Turkey has floated the idea of setting up "safe zones" inside Syria to protect civilians from the conflict but that would also have to be approved by the Security Council.Russia and China have vetoed three Security Council resolutions condemning Syrian President Bashar Assad and have blocked attempts to impose further sanctions on his government or intervene more directly in the conflict.Ankara has repeatedly complained of artillery and gunfire spilling over the border into Turkey, leading to threats of retaliation.Assad may cling to power"We believe both Syrian and Turkish authorities should exercise maximum restraint in this situation, taking into account the rising number of radicals among the Syrian opposition who can intentionally provoke conflicts on the border," Gatilov was quoted as saying.The West accuses Russia of supporting Assad in the bloody 18-month conflict and imposing a stalemate in the Security Council as violence in Syria has spiralled.Moscow says Syrians themselves should decide their fate and says it will veto any Security Council resolution that could serve as a springboard for military intervention.Russia accuses the West of overstepping its mandate when it set up a no-fly zone in Libya last year, leading to the fall of Muammar Gaddafi to a popular uprising and insurgency.Western diplomats in Moscow say Russia seems to believe Assad may still successfully cling to power though they see Russia's dialogue with some Syrian opposition groups as an attempt to secure its interests there if he were overthrown.