NEWS, 12.05.2012.

Greek president to urge unity government

Greece's president was set on Saturday to call last-ditch talks in a bid to forge an emergency unity government and avoid fresh elections, after the main parties failed to form a working coalition.Highly-indebted Greece is deeply torn over the tough austerity measures imposed as conditions for its IMF-EU bailouts, and the crisis has raised the threat it could default and leave the 17-member eurozone.Legislative elections last Sunday saw voters punish the mainstream parties and left a fractured political landscape that has raised the spectre of new elections within weeks, amid intense EU pressure over Greek finances.Socialist Pasok leader Evangelos Venizelos said Friday he had failed in the latest bid to form a government, after radical leftist party Syriza refused to join a pro-austerity coalition with the socialists and conservatives.The latest twist in the tortuous political drama came as EU paymaster Germany threatened to cut off the country's loan lifeline and hinted that the crisis-ridden eurozone could get along without Greece.Venizelos was the third party leader who tried and failed to cobble together a government after the inconclusive elections."I am going to inform the president of the republic (Saturday) and I hope that during the meeting with Carolos Papoulias, each party will assume its responsibilities," Venizelos told reporters in Athens.The head of state is then expected to urge party leaders to form a government of national salvation. If the parties cannot agree a compromise by next Thursday, new elections will have to be called.Venizelos had been hoping to win the support of Syriza, a party deeply opposed to the terms of the $311bn EU-IMF bailout and which surged to second place in Sunday's vote.Earlier, another possible ally, the small Democratic Left party, said it would not join a government made up of only Pasok and the conservative New Democracy party that did not include Syriza.Earlier this week both Syriza and the New Democracy party failed in their own attempts to assemble a coalition government.German leaders warned Friday that Athens could expect no more money without reforms and also suggested that the eurozone would cope if the cash-strapped country left the 17-member currency union.

Syria refuses to submit torture report

Syria's authorities have refused to submit a report on torture in the country to a United Nations committee scheduled to discuss the situation there next week, its secretary said on Friday.The Committee Against Torture monitors the implementation of the UN's anti-torture convention by state parties and is currently meeting in Geneva."There is no assurance that a delegation [from Syria] will come but we have been informed that no report would be submitted," committee secretary Joao Nataf told AFP in an email.He added that the meeting would take place on Wednesday as scheduled.The Committee Against Torture is holding its 48th session from 7 May to 1 June when it will focus on a number of countries including Canada, Cuba and Syria.All states party to the convention are required to submit regular reports to the panel of 10 independent experts which then makes recommendations.In November last year chairperson Claudio Grossman wrote to the Syrian authorities highlighting the committee's concern over reports of the spread of torture in the country where a bloody crackdown on protesters was unleashed in March 2011.Grossman asked Damascus to provide a special report stating the measures being taken to ensure its obligations under the Convention Against Torture were being fulfilled.Since the crackdown observers estimate more than 12 000 people have died, including more than 900 since an 12 April truce went into effect.On Tuesday UN-Arab League envoy and broker of the peace plan Kofi Annan told the UN Security Council of his fears that torture, mass arrests and other human rights violations were intensifying in Syria.

NEWS,11.05.2012.

Greek parties scramble to avert new election

 

The leaders of Greece's once-dominant political parties make their final effort today to form a coalition and avert a new election, which a poll showed would all but wipe them out and give victory to a radical leftist who rejects an EU bailout.The overwhelming majority of Greeks want to stay in the euro zone but voted last Sunday for parties that reject the severe terms of a bailout negotiated last year.European leaders say Greece will be ejected from the common currency if it turns its back on the package of tax hikes and wage cuts.Socialist PASOK leader Evangelos Venizelos, whose party once towered over Greek politics but placed a distant third in the election, will be the last politician given a chance to form a Government.He was due to meet conservative rival Antonis Samaras, whose New Democracy party came first in the election, but who has already failed to form a coalition.If Venizelos fails as well, all parties will have one last chance to try before a new election must be held in the coming three to four weeks.PASOK and New Democracy jointly negotiated the 130 billion euro EU/IMF bailout in a reluctant coalition last year and now are the only parties in Parliament that support it.Enraged voters punished them by reducing their combined share of the vote from 77 % to 32 % at last Sunday's election, leaving them two seats short of forming a coalition Government.Samaras and Venizelos may be hoping Greeks, frightened by the prospect of hasty ejection from the euro, will return to the two traditional mainstream parties if the election is re-run next month.But a new poll showed the main beneficiary of a new vote would be the hardline Left Coalition SYRIZA, whose leader Alexis Tsipras rejects the bailout and has demanded it be torn up.The first opinion poll to be published since the election showed SYRIZA would win with 27.7% of the vote, almost 11 points up on their election result, consolidating votes that had been split among smaller anti-bailout groups.Under a rule designed to make it easier to form a Government, the party that places first gets 50 bonus seats in the 300 seat Parliament.Those seats went to New Democracy on Sunday. If SYRIZA were to win them in a new election, the marginalisation of the once-mighty parties would be complete and it would be impossible to form a Government supporting the bailout.Venizelos's hope of reaching a last-ditch deal have rested with the Democratic Left party, a small moderate splinter group.But its leader, Fotis Kouvelis, insisted on Friday he would not join a coalition with the pro-bailout parties unless anti-bailout parties were also included and the new government pulled out of the loan deal."Our proposal for an ecumenical government seeks to ensure the participation of all those forces that can serve two aims: the gradual disengagement from the loan agreement and staying in the euro zone", Kouvelis told Skai TV.One socialist party official said on Thursday there was a "very slim" chance for a coalition if Kouvelis agreed, "but his party is split right down the middle."The political deadlock has prompted warnings by European leaders that Greece could be thrown out of the euro if it does not stick to the spending cuts and economic reforms required by the bailout.German Finance Minister Wolfgang Schaeuble said Europe and the IMF were still determined to help Greece, but the country could not be helped if it did not help itself.The EU and IMF say they will not give Greece any more money under the bailout until it has a government in place that renews its commitment to the terms agreed last year. Greece could run out of money as soon as the end of June if the loans stop."We do not have an infinite amount of time. Time is flying because there are financing needs, but the first steps have to be taken now from the Greek side," European Central Bank governing council member Ewald Nowotny said in Vienna.A senior SYRIZA party official said European leaders were bluffing by threatening to eject Greece from the euro to force it to stick to the bailout terms."Not only can't Greece be kicked out of the euro, they will be begging us to take the money," because if Greece were kicked out the crisis would spread to other European countries and the euro would collapse, said Dimitris Stratoulis.The prospect that Greece might declare bankruptcy and be pushed out of the euro caused panic across the single currency zone last year. But since then, European banks have written off the value of most of their Greek debt, which makes them less susceptible to shock if Greece should default.

Hollande worth $1.9 million

 

Francois Hollande, the Socialist 'Mr Normal' who will be sworn in as French president next week, says he is worth almost $1.9 million, considerably less than his predecessor Nicolas Sarkozy.Hollande, who campaigned on a promise to ditch the showbiz style that won Sarkozy the nickname of 'President Bling Bling', says in a declaration published on Friday that his principal asset is a house on France's southern Riviera coast.The declaration shows that Hollande, who rents his apartment in Paris but could now move into the presidential Elysee Palace, has declared assets of 1.17 million euros, primarily the house of 130 square metres in the chic Riviera village of Mougins.Other assets declared are bank accounts worth 8,200 euros, a life insurance contract worth 3,550 euros and 15,000 euros of furniture, said the declaration.The man who used to travel to work by scooter, and described himself as 'Mr Normal' during campaigning, does not own a car, the declaration says.Sarkozy, who hands the reins over to Hollande on May 15 and may go back to work as a lawyer, said in an official declaration in March he was worth about 2.7 million euros, up from 2.1 million when he took power in 2007.Most of that is in life insurance products but Sarkozy also declared a collection of autographs, watches and statuettes worth 100,000 euros, and a joint bank account of 57,000 euros he shares with his wife, the singer and former model Carla Bruni.Hollande's wealth falls just below the threshold that would make him liable to pay wealth tax in France.His French Riviera residence was bought in 1986 for just over half its current declared value and is the place where he spent summer breaks with former partner Segolene Royal, with whom he had four children in a quarter of a century together.He now lives with Valerie Trierweiler, a journalist who says she wants to remain working mother to pay the way for three sons she had before meeting Hollande.Hollande, whose doctor father Georges dabbled in property investment, said in his declaration he had part ownership of two apartments in Cannes that are worth 370,000 euros in all.Among the first measures he says he will implement after he takes over is a 30 percent cut in the presidential salary of more than 19,000 euros a month.

NEWS,12.03.2012.

Greece Will Suffer Less If It Leaves Euro Now

The mood on the ground in Athens has shifted palpably over the past few months. Everyone has firsthand stories of sorrow and bitterness to tell, as austerity measures bite. They speak of retired parents on rapidly shrinking pensions struggling to meet higher taxes and prices, or of young siblings with multiple masters degrees forced to work in call centers or cafés. Despite this clear sense of despair and anger, the vast majority of Greek citizens and politicians continue to think that the alternative to austerity — default and a euro-area exit — would be far worse. But this will — and should — change because leaving the euro is the lesser evil for Greece. Returning to the drachma would be ignominious, an admission of political failure. But, contrary to popular belief, it need not destroy the country and may be the only realistic way of spurring the kinds of structural reforms that are essential if Greece is to make a lasting recovery. Greece faces a stark choice about how to return to growth. It can continue along its current path of endless austerity aimed at engineering an internal devaluation. For a country that cannot control its exchange rates, this is the only way to regain competitiveness relative to other countries. This option would probably involve a decade of depression and is therefore likely to be politically untenable. Greece has a relatively recent history of profound civil unrest, which could return. The protests currently being staged in Syntagma Square are not nearly the caliber of those Greece knew during its period of military dictatorship. Reforms would be fought at every turn and things could get much worse. The alternative to internal devaluation is for Greece to default on its debts and abandon the common currency. A new drachma would depreciate massively, boosting Greece’s competitiveness almost overnight. Exiting the euro area is not an easy option. It would spark a sovereign default, a run on banks, bank defaults and capital controls. But increasingly, these things look like they may happen in Greece whether the country sticks with the euro or not. gIf all the worst effects of abandoning the euro are likely to happen regardless, then Greece may as well benefit from a nominal devaluation. Many Greeks argue that their country does not have any export industries that could gain from such nominal currency devaluation. The biggest industry — shipping — books almost all of its profits offshore, so making shipping cheaper would hardly benefit the Greek economy.

 Still, Greece has a vibrant tourism industry that contributes about 18 percent of gross domestic product and has lost business to cheaper holiday destinations in Turkey and North Africa. Agriculture, manufacturing and pharmaceuticals are also sizeable Greek export industries. All of these sectors — and therefore GDP growth generally — would benefit if relative prices on Greece’s products and services were to plummet. In addition, there’s no reason to believe Greece would be left without a financial lifeline if it exited the euro area. Its departure would be handled like a divorce, in which Greece and the so-called troika — the European Central Bank, the European Commission and the International Monetary Fund — acknowledge that their relationship no longer works. The troika would provide some bridge financing to ease the turmoil that an exit would inevitably entail for Greece. This financing would continue to be conditional on the same structural reforms that the three institutions are currently demanding. After a default and euro-area exit, however, the Greek government would have much greater incentives to deliver. Currently, the cost of failure to reform is criticism from the troika and demands for more austerity. After a default and euro exit, failure to reform would probably mean a loss of bridge financing at a time when it was urgently needed to cushion a financial shock. That could trigger dire consequences. Greece could succumb to severe social unrest. The country is not self-sufficient in food – - if hyperinflation were allowed to set in, food shortages and malnutrition could ensue. The threat of such a prospect might finally provide the impetus for a Greek government to get down to doing the hard work of structural reform, not because outsiders are telling them to, but because Greeks themselves see the options and commit to reforms. This process is crucial if Greece aspires to healthy and sustained rates of economic growth. Too much of the economy is tied up in red tape. Doing business has to be made easier. One example of the bureaucracy involved in running an enterprise in Greece is a new bookstore-cafe I visited recently in Athens. The owner had spent almost a year jumping through the hoops required to open her business, now a month old. I ordered a coffee at the cafe and the waitress walked immediately over to the bar across the street to pick one up. Despite months of trying, the owner had been unable to get a license to make coffee on the premises. Shortly after, I watched a customer get turned away when she tried to purchase a book. It was 6:05 p.m., and it is illegal to sell books after 6 p.m. in Athens. I was in a bookstore-cafe that could neither make coffee nor sell books. Doing business in Greece involves layers of bureaucracy, which provides guaranteed incomes for cushioned professions such as notaries, lawyers, tax collectors, architects and inspectors, but produces little value. At least half of the members in the Greek parliament hail from these professions and consequently are incentives to perpetuate a status quo that impedes launching, running or finding investment for businesses. On my recent visit to Athens, a number of bright, young, foreign-educated Greeks spoke to me about their hopes of forming new political movements, untainted by the main Pasok and New Democracy parties. When I asked why this has yet to happen, they responded that Greece must sink further before it will be ready to revive itself.” We are all on the sidelines, waiting for Greece to hit bottom,” one young man said to me. “We do not want to mobilize and get involved now because the house of cards could come crashing down on top of us. We will wait until the collapse has happened and then we can finally start rebuilding anew.” It is hard to imagine Greece’s current political class facing up to the country’s huge problems without the threat of economic collapse as the alternative. Nor are there obvious signs of new blood coming through the established ranks. But a Greek default and exit may trigger the emergence of a desperately needed new breed of politicians.