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!"

NEWS, 14.06.2012.

Greeks pull cash from banks before election

 

Greeks pulled their cash out of the banks and stocked up with food ahead of a cliffhanger election on Monday (NZ time) that many citizens fear will result in the country being forced out of the euro.Bankers said up to 800 million euros ($US1 billion) were leaving major banks daily and retailers said some of the money was being used to buy pasta and canned goods in case of shortages, as fears of returning to the drachma were fanned by rumours that a radical leftist leader may win the election.The last published opinion polls showed the conservative New Democracy party, which backs the 130-billion-euro ($US160 billion) bailout that is keeping Greece afloat, running neck-and-neck with the leftist SYRIZA party, which wants to cancel the rescue deal.As the election approaches, publishing polls is now legally banned and in the ensuing information vacuum, party officials have been leaking contradictory "secret polls".Yesterday, one rumour making the rounds was that SYRIZA was leading by a wide margin."This is nonsense," one reputable Greek pollster said, on condition of anonymity. "Our polls show the picture has not changed much since the last polls were published. Parties may be leaking these numbers on purpose to boost their standing."The pollster said there was some consolidation, with voters turning to New Democracy and SYRIZA from smaller parties but the pool of undecided voters remained unusually large so close to the election and the result was impossible to predict.Both parties say they want Greece to remain in the single currency but SYRIZA has pledged to scrap the bailout agreement signed in March which has imposed some of the toughest austerity measures seen in Europe in decades.The European Union and International Monetary Fund have warned that Greece, which has only enough cash to last for a few weeks, must stick to the conditions of the bailout deal or risk seeing funds cut off.Euro or drachma dilemma New Democracy has been telling voters they must choose between the euro or the drachma, while SYRIZA promises to end the austerity measures imposed by Greece's international lenders, such as salary and pension cuts, that have driven many Greeks into poverty.Fears that Greece will collapse financially and leave the euro have slowly drained Greek banks over the last two years. Central bank figures show that deposits shrank by about 17%, or 35.4 billion euros ($US44.4 billion) in 2011 and stood at 165.9 billion euros ($US208.1 billion) at end-April.Bankers said the pace was picking up ahead of the vote, with combined daily deposit outflows from the major banks at 500-800 million euros ($US625 million to $US1 billion) over the past few days, and 10-30 million euros ($US12-36 million) at smaller banks."This includes cash withdrawals, wire transfers and investments into money market funds, German Bunds, US Treasuries and EIB bonds," said one banker, who spoke on condition of anonymity.Retailers said consumers were stocking up on non-perishable food while almost all other goods were seeing a huge drop in sales as cash-strapped Greeks have no money to spare in the country's fifth year of recession."People are terrified by the prospect of returning to the drachma and some believe it's good to fill their cupboard with food products," said Vassilis Korkidis, head of the ESEE retail federation."It's over the top, we must not panic. Filling the cupboard with food doesn't mean we will escape the crisis," he said.Supermarkets said they did not see a rise in profits as people spend less money. But sales of staples like pasta have gone up.A generation that suffered the deprivations of the Nazi occupation of Greece has traditionally raided supermarkets ahead of any impeding crisis, for fear people will go hungry. Their children have picked up the habit and are stocking up on basics."It's fear that is motivating people," said Anastassia Tzorbatzidou, mother of three, who says she has her shelves full. "When you have kids, it's better to have something."

Italy, France find common ground on crisis

 

The Italian and French leaders on Thursday found common ground on how to confront Europe's worsening debt crisis, emphasizing that budget discipline should not come at the expense of economic growth and calling for a region-wide move to boost market confidence.The leaders held their first bilateral meeting since President Francois Hollande took office last month as Italy's borrowing costs skyrocketed on concerns the country may be the next, after Spain, to need financial aid.The positions outlined by Italian Premier Mario Monti and Hollande, however, were at odds with those espoused by Chancellor Angela Merkel.Europe's crisis response `'has not been enough to protect the euro from market turbulence," Monti said. "We need to reinforce the weak points of the system" in both the real economy and finance. The two leaders agreed that focusing on growth does not mean abandoning budgetary discipline.`'But public account discipline is not enough to have growth, foster development and create jobs," Monti said.The two men also discussed launching eurobonds, jointly issued bonds that would spread debt risk that both support. Germany opposes the bonds out of concern they will lead to fiscal laxity.Monti pointedly noted that Italy and France have together contributed 40 percent of the eurozone's bailout funds to date, staking a claim for the legitimacy of their views.The need for action to boost market confidence in the euro was evident in the bond market movements on Thursday.Italy paid 5.3 percent to raise (EURO)3 billion ($3.76 billion) in three-year bonds from financial markets, up from 3.91 percent last month and the highest level since December.The high rate underscores how investors are increasingly worried Italy will be destabilized by market turmoil in Spain and might run into trouble servicing its debt as it wallows in a deep recession. Political wrangling over reforms has also raised questions over the government's ability to overhaul the economy.To boost confidence in the euro, Hollande said a solution must be forged not just between France and Italy, but with other countries ahead of a European summit on June 28."Growth is the first thing, the second is stability ... the third point is deepening euro monetary union," Hollande said.Monti's technocratic government came to power in November with broad, bipartisan support from political parties to reform the economy. However, lawmakers have in recent weeks shown signs of returning to the old Italian ways of political jockeying. Lobbies and some parties have pushed to water down some reforms.The lower house of Parliament passed a package of anti-corruption measures aimed at making Italy a more just society  something that Monti, a former EU competition commissioner, believes will help encourage more risk-taking and enterprise-building. After being bruised on labor reforms, Monti's government attached the package to three votes of confidence on the most contentions passages, all of which easily passed lower house votes. Despite the passage, there were many calls for changes when the Senate takes up the package  an indication of more political gridlock

NEWS,27.01.2012.

Germany pushing for Greece to give up budget controls

 
Germany is pushing for Greece to relinquish control over its budget policy to European institutions as part of discussions over a second rescue package, a European source said today.” There are internal discussions within the Euro group and proposals, one of which comes from Germany, on how to constructively treat country aid programmes that are continuously off track, whether this can simply be ignored or whether we say that's enough," the source said. The source added that under the proposals European institutions already operating in Greece should be given "certain decision-making powers" over fiscal policy.” This could be carried out even more stringently through external expertise," the source said. The German demands for greater control over Greek budget policy come amid intense talks to finalise a second 130-billion euro rescue package for Greece, which has repeatedly failed to meet the fiscal targets set out for it by its international lenders. Greece needs to strike a deal with creditors in the next couple of days to unlock its next aid package euros in order to avoid a chaotic default.

” No country has put forward such a proposal at the Eurogroup," a Greek finance ministry official said on condition of anonymity, adding that the government would not formally comment on reports based on unnamed sources. The German demands are likely to prompt a strong reaction in Athens ahead of elections expected to take place in April.” One of the ideas being discussed is to set up a clearly defined priorities on reducing deficits through legally binding guidelines," the European source said. He added that in Greece the problem is that a lot of the budget-making process is done in a de-centralised manner.” Clearly defined, legally binding guidelines on that could lead to more coherence and make it easier to take decisions - and that would contribute to give a whole new dynamic to efforts to implement the programme," the source said.” It is clear that talks on how to help Greece get back on the right track are continuing," the source said.” We’re all striving to achieve a lasting stabilisation of Greece," he said.” That’s the focus of what all of us in Europe are working on right now."