NEWS,17.10.2012

Putin says Russia will not be dictated to on arms sales

President Vladimir Putin said today that only the UN Security Council could restrict Russian weapons sales abroad, a remark that appeared aimed at defending the Kremlin against criticism of its arms supplies to the Syrian government."Only sanctions imposed by the UN Security Council can serve as a basis for limiting weapons supplies," Putin said, according to state-run Itar-Tass news agency."In all other cases, nobody can use any pretext to dictate to Russia on how it should trade and with whom," he was quoted as telling a meeting of a state commission on the arms trade.The West has criticised Russia for vetoing, along with China, three UN Security Council resolutions aimed at putting pressure on Syrian President Bashar al-Assad to end a conflict that has killed an estimated 30,000 people in 19 months.Russia sold Syria $1 billion worth of weapons last year and has made clear it would oppose an arms embargo in the Security Council because of what it says are concerns rebels fighting Assad's government would get weapons illegally anyway.Putin said in June that Russia was not delivering any weapons to Syria that could be used in a civil conflict.Turkey said on October 11 that a Syrian passenger plane grounded en route from Moscow to Damascus was carrying weapons. Moscow said the cargo included radar parts that were of dual civilian and military use but were fully legal.Moscow in 2010 scrapped plans to deliver high-precision air defence missile systems to Iran, citing sanctions imposed by the UN Security Council over Tehran's nuclear programme, a move welcomed by the United States and its European allies.Russia denies trying to prop up Assad, who allows Russia to maintain a naval supply facility in the port of Tartus that is its only military base outside the former Soviet Union.But Moscow says Syria's crisis must be resolved without foreign interference, particularly military intervention.

Greece declares progress as inspectors depart

Inspectors from Greece's international lenders will leave Athens after making substantial progress on talks to unlock aid for the near-bankrupt country but without agreement on crucial labour reforms, officials said today.After months of often heated and testy negotiations, Athens and its European Union and International Monetary Fund lenders appeared to be in the home stretch toward a comprehensive deal on spending cuts and reforms needed to avoid a Greek bankruptcy."I'm confident we're doing everything we have to do in order to get it (a deal) and get it soon, so that we can move towards a recovery," Prime Minister Antonis Samaras said at a meeting of European centre-right parties in Bucharest.A senior Greek government official earlier said the two sides had reached agreement on all issues except labour reforms.In a rare statement to reporters during talks late on Tuesday, the IMF's mission chief for Greece, Poul Thomsen, also declared that the two sides had agreed on "most policy issues", with agreement on the rest expected soon.Thomsen and his European Commission and European Central Bank counterparts are due to depart Athens today in order to brief leaders at a two-day European Union summit, where Greece's future will loom large despite not being the focus of talks.Once a deal on the austerity package and reforms is clinched, the so-called troika of EU, ECB and IMF lenders are due to present a report on Greece's progress in meeting the terms of its bailout and whether it can cut its debt down to sustainable levels.That report is expected to show that Greece is hugely off track on its commitments, which critics blame on a lack of political will, political paralysis during repeat elections this year and a deeper than expected recession.But with Greece due to run out of money next month and Europe determined to avoid fresh market turmoil that drags down bigger economies like Spain and Italy, Athens is expected to ultimately secure its next 31.5 billion euro aid tranche.Still, Athens needs the blessing of the troika on a 11.5 billion euro austerity package as well as a long list of reforms first to be able to unlock that aid.Talks on both fronts have moved slowly since July, with signs of progress tempered by tension and mistrust over the ability of Greece's political brass to push through public sector reform and generate savings."Hard red line" On Tuesday, the two sides resolved differences on the extent of Greece's recession next year and issues related to health spending cuts after hitting an impasse on labour reforms during an earlier round of talks, officials said.They agreed Greece's economy would contract 4.2% next year - a key estimate in calculations to determine whether Greek debt will be viable - after Athens initially predicted a 3.8% tumble and lenders forecast a 5% contraction.Officials also suggested that most of the issues related to the long-discussed spending cuts package had been resolved apart from disagreement over the use of brand name or generic drugs in the state healthcare system."There has been substantial progress on all fronts and only some issues remain open, mainly labour and structural," a second Greek government official said."We are confident these will also be resolved in time."

Wall Street rises on US housing data

Global stocks rose and the euro hit a one-month high today, helped by brighter prospects for resolving Spain's debt woes, while better-than-expected housing data and gains among financials lifted the US equity market.US and German government debt prices fell after Spain avoided a damaging ratings downgrade from Moody's and stronger-than-expected US housing data pointed to an improving economy, which reduced safe-haven demand.Growing speculation that Spain will ask for a bailout next month lifted the euro. A possible line of credit to Spain and some easing of German opposition to aid for Greece and Spain were also likely to support the euro in the near term.Wall Street was mostly higher, putting the S&P 500 on track for a third day of gains, but disappointing results from Intel Corp and IBM weighed on the Dow.Intel slumped 3.0% to $21.68 while IBM lost 5.2% to $200.08. Both were among the biggest drags on the Dow and Nasdaq 100.M&T Bank jumped 5.2% to $102.48 after posting third-quarter results, helping to lift the KBW Bank index 1.5%, while the S&P financial services index rose 1.1%, the biggest gainer among the 10 S&P 500 sectors."It seems like it's a classic earnings period reaction. Either people are too exuberant and expectations are raised too high to beat when the actual number comes out or people are too pessimistic and the earnings are just not as low," said Rick Meckler, president of hedge fund Liberty View Capital Management in Jersey City, New Jersey.The Dow Jones industrial average was down 7.52 points, or 0.06%, at 13,544.26. The Standard & Poor's 500 Index was up 6.30 points, or 0.43%, at 1,461.22. The Nasdaq Composite Index was up 10.01 points, or 0.32%, at 3,111.19.European shares rose for a third consecutive session after Spain clung to its top grade credit rating, bolstering expectations the euro debt crisis can be contained."Spain is in a better place for now," said Richard Robinson, a fund manager at Ashburton who recently bought shares of Spanish bank Bankinter and Italian bank Intesa on prospects of improved euro zone economic problems.The FTSE Eurofirst 300 index of top European shares gained 0.5% to close at 1,118.62. MSCI's all-country world equity index rose 0.8% to 338.24, extending Tuesday's 1.2% gain.The euro was up 0.55% at $1.3124, its highest since mid-September.Bond losses accelerated after data showed that groundbreaking on new US homes surged in September to its fastest pace in more than four years, another sign that the housing sector's budding recovery is gaining traction."The housing starts and permits are both up a ton. The market was already selling off, it started overnight with Moody's affirming Spain's investment grade rating," said James Newman, head of Treasuries and Agency trading at Keefe, Bruyette and Woods in New York.Benchmark 10-year notes fell 19/32 in price to yield 1.79%.Brent crude futures fell further and US crude turned lower in choppy trading after a report from the Energy Information Administration showed US crude oil stocks rose more than consensus expectations last week.December Brent fell 92 cents to $113.08 a barrel. US oil for November fell 21 cents to $92.88.

NEWS,31.07.2012

Cyprus taxes set for hike to pay for bailout

International lenders negotiating a bailout for cash-strapped Cyprus are likely to seek cutbacks in its public payroll and some increases in taxation, the Cypriot finance minister said today.Officials from the International Monetary Fund, European Commission and European Central Bank held inconclusive talks in Cyprus last week. Cypriot officials said discussions would continue, with a new visit by the team, known as the "troika", possibly in September."From our side, there are certain issues which are not acceptable from the outset and require further discussion," said Vassos Shiarly, Cyprus's finance minister.He did not elaborate on the differences with lenders - the troika's insistence on scrapping wage indexation has been widely reported as a point of dispute - but implied that cutbacks in salaries in an inflated public sector could be an option.Cyprus, one of the smallest of 17 nations sharing the euro, became the fifth member of the currency bloc to seek a bailout last month, in its case from a banking sector burdened by the debt restructuring European leaders agreed for Greece."Based on the experience of Portugal and Spain, we believe the troika will expect cutbacks in state spending, which include the payroll, and an increase in taxes which will not impact the economy," Shiarly, a former top banker, told the semi-official Cyprus News Agency.He said however that the decision on what measures to take would be up to Cyprus, and not lenders."Since we are trying to find a considerable amount, that won't be achieved by cutting back on electricity or telephone bills," he said.Authorities introduced staggered cuts in public sector salaries last year, a two-percentage point rise in value-added tax this year, and increased tax on private-sector earnings.Glafcos Hadjipetrou, who heads Cyprus's main civil servants union Pasydy, said any measures should be balanced. "It is not possible for some people to finger-point and target public sector workers at every opportunity," he told reporters.Cyprus's two largest banks booked considerable losses on the writedown in Greek sovereign debt this year, diluting their regulatory capital and forcing them to seek government aid to recapitalise. Combined, the banks seek 2.4 billion euros, the equivalent of more than 10 percent of Cyprus's GDP.Shut out of international financial markets for more than a year in part because of fiscal slippage, Cyprus had little option but to seek aid from its EU partners.It has also asked Russia, which lent Cyprus 2.5 billion euros last year, for another 5 billion euro loan.It is not clear how much Cyprus will require from the troika. Authorities say the bailout will be comprehensive, and not limited to recapitalising banks.

 

Greece says cash reserves drying up

 

Near-bankrupt Greece is fast running out of cash while it waits for its next installment of aid from international lenders, a deputy finance minister said on Tuesday, sounding the alarm on the country's precarious financial position. Greece's European partners have repeatedly promised the country will be funded through August, when it must repay a 3.2 billion euro bond, but the details of the funding have yet to be disclosed.In the absence of that money, Greece would run out of funds to pay everyday public expenses ranging from police and other public service wages to pensions and social benefits. The country is wholly reliant on aid from its European partners and the International Monetary Fund, who have turned up the pressure in recent weeks by withholding further aid until an assesment of Greece's compliance with reforms is complete."Cash reserves are almost zero. It is risky to say until when (they will last) as it always depends on the budget execution, revenues and expenditure," Deputy Finance Minister Christos Staikouras told state NET television."But we are certainly on the brink, we did not receive the aid tranche we were supposed to and we have the pending issue of an ECB bond maturing on Aug. 20." Greece has narrowly dodged bankruptcy several times before, with the government carrying out a juggling act of holding off on paying some suppliers and issuing T-bills until the next tranche of aid from lenders arrives. The assessment of Greece's progress in meeting the terms of its bailout by EU/IMF inspectors, who are currently on a visit to Athens, is not expected until September. Adding to the uncertainty, Greek political leaders have been wrangling over €11.5bn of cuts that are crucial to appeasing the lenders.

 

Obama: Eurozone must take decisive steps

 

US President Barack Obama said on Monday that the eurozone is not buckling under the weight of the debt crisis, but that "decisive steps" have yet to be taken.Speaking at an event for campaign donors, the Democratic incumbent in the November 6 presidential election noted that the US economy is still unsteady, and warned of "some continued headwinds over the next several months.""Europe is still a challenge, and a lot of people in this room who have business in Europe understand that," he said to some sixty people, including Wall Street CEOs. "I don't think ultimately that the Europeans will let the euro unravel. But they're going to have to take some decisive steps. And I'm spending an enormous amount of time trying to work with them - and Tim Geithner is spending a lot of time working with them - to recognise that the sooner they take some decisive action, the better off we're going to be," Obama added, referring to the US treasury secretary.Obama spoke of the US's own "decisive action," referring to the $800bn stimulus package his administration pushed for in 2009."Despite it's unpopularity, (the plan) avoided this chronic bleeding wound that has been an enormous problem not just for Europe now, but for the entire global economy," he said.Obama's campaign for reelection suffers in the the polls from voters' attitudes on the wavering economy. Unemployment is at 8.2%, still 3% higher than before the 2008 crisis, and the White House does not expect the rate to dip below 7.9% before the end of the year.

NEWS,07.03.2012.

Iran will allow UN inspectors into complex

IRAN will grant UN inspectors access to a military complex where the UN nuclear agency suspects secret atomic work has been carried out, the semi-official ISNA news agency reports. Tehran had previously banned UN inspectors from visiting the Parchin installation, southeast of Tehran, but a statement by Iran's permanent envoy to the International Atomic Energy Agency today said the visit would now be allowed in a gesture of goodwill. However, it would require an agreement between the two sides on guidelines for the inspection, ISNA reported. Inspecting Parchin was a key request made by senior IAEA teams that visited Tehran in January and February. Iran rebuffed those demands at the time, as well as attempts by the nuclear agency's team to question Iranian officials and secure other information linked to the allegations of secret weapons work. The latest development comes a day after IAEA chief, Yukiya Amano, expressed growing concern that there was new activity at Parchin. Amano did not specify whether he believed the activity was linked to suspected new weapons experiments or attempts to clean up previous alleged work. The Parchin complex has been often mentioned in the West as a suspected base for secret nuclear experiments - a claim Iran consistently denies. IAEA inspectors visited the site in 2005, but only one of four areas on the grounds and reported no unusual activities. Last year, IAEA's report said there were indications Tehran has conducted high-explosives testing to set off a nuclear charge at Parchin. Iran denied the atomic activity and insisted that any decision to open the site rests with the armed forces since it was a military, not nuclear, facility.Speaking yesterday in Vienna, Austria, Amano said the suspicions of "activities ... ongoing at the Parchin site" in Iran means "going there sooner is better than later" for IAEA inspectors seeking to probe suspicions that Iran has been - or is - working secretly to develop nuclear arms."We have our credible information that indicates that Iran engaged in activities relevant to the development of nuclear explosive devices," Amano said outside of a 35-nation IAEA board meeting in Vienna, describing his sources as "old information and new information”. Iran denies any intention of possessing nuclear weapons and says all of its atomic activities are peaceful, but the IAEA says it has intelligence-based suspicions that may not be the case based on thousands of pages of documentation.” Given that Parchin is a military site, access to this facility is a time-consuming process and it can't be visited repeatedly," ISNA quoted the Iranian statement as saying. It added that following repeated IAEA demands, "permission will be granted for access once more”. The statement added that Tehran and IAEA need to agree on "modalities" before the visit can take place. There was no immediate comment at the IAEA headquarters in Vienna on Tehran's decision. It comes as fears are growing that Israel's air force may soon strike Iran in an attempt to destroy its nuclear facilities. President Barack Obama met with Benjamin Netanyahu in Washington yesterday and told the Israeli prime minister that the United States "will always have Israel's back," but that diplomacy is the best way to resolve the crisis over potential Iranian nuclear weapons.