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Tuesday, June 26, 2012

Liberal economist tapped to spearhead Greek economy overhaul


BBC News

Liberal economist tapped to spearhead Greek economy overhaul
Los Angeles Times
ATHENS -- Greece's creaky governmental coalition on Tuesday appointed liberal economist Ioannis Stournaras to spearhead efforts to fix the country's broken economy after its first choice, National Bank of Greece Chairman Vassilis Rapanos, ...
Can someone, anyone govern? New Greek govt hit by yet another resignation of ...Washington Post
New Greek govt hit by yet another resignationThe Associated Press

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Cyprus: no figure yet on size of EU bailout sought

Cyprus' finance minister says the eurozone country has yet to figure out how much European Union bailout money it will ask for to prop up its Greece-exposed banking sector and ailing economy.

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Romanians lose faith in squabbling politicians

Romania's Prime Minister and Social Liberal Union alliance leader Ponta gestures during a news conference in BucharestBUCHAREST (Reuters) - Romanians are losing patience with politicians who seem more interested in arguing with each other than addressing problems that beset the European Union's second poorest member. That may push voters in a parliamentary election that is only five months away towards populist parties or fringe members of mainstream parties who pursue more extreme policies, as it has in Greece or neighboring Hungary. Victor Ponta, Romania's third prime minister in five months, took power in May and is already under pressure over plagiarism charges. ...



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François Hollande and Angela Merkel meet in Paris with high stakes at play

Franco-German discussions need to build 'a concrete path' for Europe, says José Manuel Barroso

Chancellor Angela Merkel goes to Paris on Wednesday to try to strike a Franco-German deal with President François Hollande amid deep-seated differences at what has been described as Europe's defining moment.

With the two key EU countries split for the first time in 30 months of single currency and sovereign debt crisis, José Manuel Barroso, head of the European Commission laid bare the high stakes in play at an EU summit in Brussels on Thursday as well as the high frictions between Germany and France.

Merkel's first visit to the Élysée Palace under its new occupant has been hastily arranged and comes on the eve of what is being billed as a crucial Brussels summit which, apart from the immediate financial dilemmas, is to wrestle with a radical blueprint aimed at turning the 17 countries of the eurozone into a fully-fledged political federation within a decade.

"We must articulate the vision of where Europe must go, and a concrete path for how to get there," warned Barroso. But he was unsure "whether the urgency of this is fully understood in all the capitals of the EU".

Since his election last month, France's socialist leader has quickly emerged as the most formidable challenger to German formulas for Europe's salvation after two years of Berlin largely dictating the EU response to the crisis.

Merkel is feeling bruised, having just withstood two unusual attempts by fellow leaders to ambush her and get Berlin to hand over its credit cards to write off what they see as other countries' profligacy.

In Mexico last week at the G20 and then in Rome at two bad-tempered summits in recent days, the Americans and the British – in cahoots with the leaders of France, Spain and Italy – sought to press Merkel into bankrolling fiscal stimulus and bank recapitalisation policies that would cut the vulnerable eurozone countries' cost of borrowing.

"It was all wishful thinking or a political game," said a senior EU official of the ambush attempts. "There are substantial economic and political interests at play. Governments are spinning in their respective interests."

The pressure on Merkel may have backfired and reinforced German resistance to the ideas. The view in Berlin is that Hollande will have to back down amid the relative weakness of the French economy.

The blueprint unveiled on Tuesday calls for a eurozone political federation to be built over a decade entailing four stages. The details are thin and are to be fleshed out by the end of the year by the heads of four of the main European institutions, but the proposals – a response to the Greek drama that erupted 30 months ago and which has engulfed the EU into its most perilous crisis ever – mark the most ambitious European plan since agreement on the single currency was reached at Maastricht 20 years ago.

Thursday marks the start of what will be a long, exhausting, and bruising battle essentially pitting German-led integrationist pressure against French-led protection of sovereign authority and reluctance to cede immense powers over budgets and tax-and-spend policies to Brussels and a new eurozone finance ministry, proposals that also raise fundamental questions about democratic legitimacy in the EU.

To be realised, the "political union" would require a major legal overhaul, reopening EU treaties, endless quarrels, probably a new German constitution and perhaps a referendum in Britain and its departure from the EU.

"These decisions on deeper economic, financial and fiscal integration imply major changes to the way our citizens are governed and to the way their taxes are spent," said Barroso. "This crisis is the biggest threat to all that we have achieved through European construction over the last 60 years… A big leap forward is now needed."

The proposals, likely to expose fundamental splits over Europe's future, will do little to resolve the immediate debt and currency crisis. The hope is that the medium-term master plan will placate the financial markets by demonstrating political resolve to defend the currency at all costs. The risk is that the leaders will appear so divided that the markets might step up their probing of the weaker bits of the eurozone, notably Spain and Italy.

Without a Franco-German accord, the prospects of a damaging summit in Brussels are high. Last week Hollande issued policy proposals for the summit, a growth and jobs pact whose details are anathema to Berlin – the issue of short-term shared eurozone debt leading to full pooled debt, common eurozone guarantees for bank deposits, protectionist measures favouring European manufacturers and bidders for public contracts over outsiders as well as direct eurozone recapitalisation of dodgy banks without increasing national debt levels.

The Germans feel under pressure, but Merkel will court big trouble at home if she yields. A pro-European commentator in Der Spiegel this week suggested she should sacrifice her political career to save Europe and the currency.

There is little chance of that happening. But the German elite is deeply worried about Hollande's France, because of the impact it could have on the German economy's prospects battling the emerging might of China, India or Brazil.

Berlin's angst is that Europe can only be saved and a successful Europe re-established if the two core countries are in harness, that it cannot bear the burden alone, and that if the Franco-German dynamic dissipates, the German economy will be among the biggest victims of failure.

Berlin points to the widening gap in employment costs between Germany and France; a youth unemployment rate in France triple that of Germany; Hollande's first move in reducing the retirement age and France's overall loss of competitiveness over the past decade. It fears being dragged down as a result. The cautious hope is that Hollande will turn out or be forced to be France's Gerhard Schröder, the ex-German chancellor and, like Hollande, a social democrat who executed the economic, welfare, and structural reforms a decade ago that put Germany in its current strong shape.

Hollande heads a socialist party, however, that is a lot less "modernised" than Schröder's SPD or the Labour Party under Blair and which is eternally split over Europe. Hollande's foreign minister, Laurent Fabius, spearheaded the No campaign in the French referendum that sunk the European constitution in 2005.

And the crisis is throwing into sharp relief the basic divisions, particularly on the grand plan being fought over . A crisis that started financially on the EU's periphery, in Greece, Ireland, and Portugal, has now shifted politically to the union's heart, the Berlin-Paris axis.

France may baulk at the blueprint being tabled, being deeply reluctant to surrender so much sovereign power to new eurozone authorities, while Germany will only accept the liability for others being thrust on it if the powers are federalised.

A senior EU diplomat intimately involved in the Franco-German dynamic for 20 years says, however, that Merkel and Hollande are condemned to forging a modus operandi and that the stakes are too big.

"Helmut Kohl and François Mitterrand were dreadful at the start. They hated each other. Gerhard Schröder and Jacques Chirac was the lowest I ever saw. It's always like this with France and Germany," he said.

"They always represent different positions and then they find a compromise that everyone else agrees with except the UK."


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New Greek govt hit by yet another resignation


The Associated Press

New Greek govt hit by yet another resignation
The Associated Press
By DEREK GATOPOULOS, AP – 1 minute ago ATHENS, Greece (AP) — Can there be one day without bad news for the new Greek government? Perhaps, but not Tuesday. The coalition government suffered another setback as a second Cabinet member quit in two days ...
Outspoken Greek professor gets eurozone's hardest jobAFP
Greek government hit by fresh resignationCBC.ca
"Mr Euro" named Greek finance ministerReuters UK

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"Mr Euro" named Greek finance minister


BBC News

"Mr Euro" named Greek finance minister
Reuters
* Technocrat Stournaras named finance minister * Stournaras was in team that negotiated Greek euro entry * Banker Rapanos resigned five days after being named By Deepa Babington and Lefteris Papadimas ATHENS, June 26 (Reuters) - Yannis Stournaras, ...
Greek Premier Appoints New Finance MinisterNew York Times
Greece: New government hit by fresh resignation, deputy minister quitsWashington Post
Greek PM Accepts Deputy Merchant Marine Minister ResignationWall Street Journal

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Greek PM plans European tour after recovery: source


Greek PM plans European tour after recovery: source
Reuters
ATHENS (Reuters) - Prime Minister Antonis Samaras will visit Germany, France and Brussels to seek changes to Greece's bailout deal as soon as he recovers ...

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Yannis Stournaras takes over as Greek finance minister

The man who took Greece into the euro ten years ago has become the country’s latest finance minister. He is replacing banker Vassilis Rapanos who was forced to resign due to health reasons.

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EU set to discuss size of Cyprus bailout

Cyprus could be asking for up to 10 billion euros as nearby debt-stricken Greece appoints a new finance minister.

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Leaders weigh urgent steps as Europe summit nears





BRUSSELS (AP) — European leaders are reaching for bold solutions to end a 2-year-old debt crisis that's spread economic misery across Europe, raised doubts about the future of the euro currency, rattled investors and threatened global growth.

Investors have driven up interest rates on Spanish and Italian debt to unsustainable levels, raising the risk those big countries will need a bailout the rest of Europe can't afford.

Even an election that brought a pro-euro-alliance Greek government to power failed to reassure investors that Greece would continue to pay its bills, keep using the euro and avoid a financial crackup that could set off a worldwide panic.

The worldwide financial crisis and the recession that followed ripped a hole in the budgets of many European governments, leaving them with huge debts.

Or excessive government debts — anything beyond 60 percent of a country's output — could go into a "European debt redemption fund," guaranteed collectively and paid down over 20 to 25 years.

Because the redemption fund would be a one-time move, it might be more palatable to Germany than a long-term eurobond plan.

—Handing power to a centralized eurozone budget authority to demand changes in individual countries' taxing and spending plans if they break budget rules.

—Tapping the $625 billion available from the eurozone's two bailout funds to buy government bonds on the open market.

[...] Europe faces the risk of banks runs:

—The European Commission, which writes laws and regulations for the EU, has proposed a deposit insurance fund to protect savers across the EU the way the Federal Deposit Insurance Corp. guarantees up to $250,000 per account in the United States.

Instead of lending money to Spain, pump it directly into Spanish banks and take an ownership stake in them.

The coalition government that emerged from Greece's June 17 election has said it's willing to make the painful budget cuts required under a bailout deal agreed to in March.

Greek voters chose that approach over a government that would have rejected the bailout and likely led Greece out of the eurozone.

The European Commission's banking plans wouldn't take full effect until 2018— not soon enough to calm depositors in troubled Spanish banks or allay fears of a banking crisis.


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Greek Premier Appoints New Finance Minister


Globe and Mail

Greek Premier Appoints New Finance Minister
New York Times
ATHENS — Prime Minister Antonis Samaras on Tuesday appointed Yannis Stournaras, an economist and former government adviser who served as development minister in the previous caretaker administration, as the country's new finance minister.
Greece: New government hit by fresh resignation, deputy minister quitsWashington Post
Greece Appoints Economist Stournaras As New Fin MinWall Street Journal
Greek government hit by fresh resignationThe Associated Press

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Yannis Stournaras Is Named New Greek Finance Minister

Yannis Stournaras, a prominent economist, is expected to succeed Vassilis Rapanos, who resigned before he could be sworn in, citing health problems.





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Greece Appoints New Finance Minister


Christian Science Monitor

Greece Appoints New Finance Minister
Wall Street Journal
Greece's new government on Tuesday picked Yannis Stournaras, a 55-year-old professor of economics, to be finance minister, replacing the previous nominee ...
Greece Names Stournaras as New Finance MinisterNew York Times
Greece: New government hit by fresh resignation, deputy minister quitsWashington Post
Greece names new finance ministerChristian Science Monitor
Atlanta Journal Constitution
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"Mr. Euro" named Greek finance minister

ATHENS (Reuters) - Yannis Stournaras, an affable and well-respected liberal economist, was appointed Greece's new finance minister on Tuesday after the sudden resignation of the first choice for the job at a crucial moment for the debt-laden country.



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Greek PM Accepts Deputy Merchant Marine Minister Resignation


Greek PM Accepts Deputy Merchant Marine Minister Resignation
Wall Street Journal
ATHENS--Greek Prime Minister Antonis Samaras has accepted the resignation of Deputy Merchant Marine Minister Giorgos Vernikos, the prime minister's office ...

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Greece Names New Finance Chief

Greece's new government picked Yannis Stournaras, a 55-year-old professor of economics, to be finance minister, replacing the previous nominee a day after he bowed out because of health problems.

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Greek government hit by fresh resignation

ATHENS, Greece (AP) — A second Greek Cabinet member has resigned in two days, the latest casualty for the financially struggling country's new conservative-led government.

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Greek government hit by fresh resignation as Giorgos Vernicos departs


A Greek cabinet member has resigned, the latest casualty for the crisis-hit country's new conservative-led government.



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Greece names new finance minister

The Greek government appoints a new finance minister after its first choice resigned due to ill health less than a week after being appointed.

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Leading economist named as Greek finance minister

Yannis Stournaras will take over the post, after designated finance chief Vassilis Rapanos resigned Monday



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Greece names second finance minister in five days





Greece's new government on Tuesday appointed economist Yannis Stournaras as its finance minister as it begins to renegotiate the harsh terms of an unpopular bailout agreement. His predecessor resigned for health reasons five days after being named.





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Greek finance minister Vassilios Rapanos quits before he started in the job


Greece will enter Thursday's critical European summit in a state of disarray after its Finance Minister-designate resigned over health problems yesterday.



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