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Friday, June 29, 2012

Greece roads to close July 4 for celebration


News 10NBC

Greece roads to close July 4 for celebration
Rochester Democrat and Chronicle
A portion of North Greece Road will be closed on July 4 for the Spirit of American Fourth of July Celebration at Grace and Truth Sports Park.
Fireworks return to Greece this yearGreece Post
Fourth Of July Fireworks Return To Greece13WHAM-TV

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Turkey talks tough on Cyprus EU presidency

As if times weren't tough enough for the EU, the next six months could add more turbulence as the Greek-Cypriot-led divided island of Cyprus takes over the EU presidency - much to Turkey's chagrin.

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Greek lawmakers shun extreme right party


Atlanta Journal Constitution

Greek lawmakers shun extreme right party
Atlanta Journal Constitution
ATHENS, Greece — Greek lawmakers banded together Friday to keep an extreme right-wing party out of the position of deputy parliament speaker, leaving one of the seven posts vacant rather than filling it with a member of a group many consider to be ...
Greek Parliament votes for speaker, deputies, in potential showdown with ...Washington Post
Greek Parliament Electing SpeakersABC News

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Italy celebrates a magical night against Germany





Premier Mario Monti and striker Mario Balotelli gave a much-needed boost to a country suffering for months under harsh austerity measures and embarrassed by a match-fixing scandal in its national sport in which dozens have been arrested.

To the east in Warsaw, the talented soccer player with a discipline problem led Italy's national team to a 2-1 victory over Germany, propelling them into the finals of the European soccer championships.

Monti, an economics professor who replaced the flamboyant Silvio Berlusconi with a mandate to put debt-ridden Italy's finances in order, had vowed to keep talking at the EU summit until an agreement was hammered out.

"May I stress that Italy worked a lot and put a lot of pressure at the negotiating table for this result to be achieved," he said, referring to measures to contain borrowing costs.

During the overnight talks, he seemed to be leading the charge against Merkel and several other northern European leader who fear having to pay even more in bailouts and loans for the profligate south, composed of Greece, Spain, Portugal and Italy.


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‘Broke’ Cyprus to assume EU presidency





With a debt of 14 billion euros and heavy exposure to the Greek crisis, Cyprus is in a precarious economic position. As the country takes up the rotating EU presidency for the first time, Europe watchers are wondering just what it might achieve.





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Europe's next big steps to tackle crisis





— Once that is done, the eurozone's two bailout funds, known by their acronyms EFSF/ESM, will be able to recapitalize banks directly, rather than first handing over the money to the government of the country where they are based.

— They agreed that countries that are working to control their budgets could tap the rescue funds without having to go through the tough austerity measures that Greece, Ireland and Portugal were forced to accept in return for their bailout cash.

Yet as a precondition for membership in the eurozone, all countries have already agreed to limit budget deficits to 3 percent of their gross domestic product and total debt levels of no more than 60 percent of GDP.


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Greek Parliament votes for speaker, deputies, in potential showdown with extreme right party

ATHENS, Greece - Greece's 300 new lawmakers are voting for a Parliament speaker and deputy speakers, in what could be the first showdown with an extremist right-wing party recently elected into office for the first time.

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In Greece, Syriza Will Be Back With a Vengeance


CBC.ca

In Greece, Syriza Will Be Back With a Vengeance
CNBC.com (blog)
They had to choose between two diverse groups of parties: a group of moderate parties from center-right to center-left which gave first priority for Greece to stay in the euro zone and renegotiate its bailout terms as far as this is realistically ...
Greece's political crisis persistsWashington Post
Greece's PM Reaffirms Commitment to Bailout ProgramWall Street Journal
Greece has earned blameBeaver Dam Daily Citizen
Reuters -CBC.ca -Businessweek
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Greek Parliament electing speakers


Greek Parliament electing speakers
KFVS
Greece's 300 new lawmakers are voting for a Parliament speaker and deputy speakers, in what could be the first showdown with an extremist right-wing party recently elected into office for the...

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Greek Parliament votes for speaker, deputies, in potential showdown with ...


euronews

Greek Parliament votes for speaker, deputies, in potential showdown with ...
Washington Post
ATHENS, Greece — Greece's 300 new lawmakers are voting for a Parliament speaker and deputy speakers, in what could be the first showdown with an extremist right-wing party recently elected into office for the first time.
New Greek deputies sworn in to ParliamentThe Associated Press

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Market relief follows EU summit

Greek bank stocks soared by more than 12 per cent on Friday in a relief rally after some signs of progress on the eurozone debt crisis at the EU summit.

The basic share price index was up 4.14 per cent and turnover was 8.775 million euros. Individual sector indices were moving upward, with the biggest gains in Banks, up 12.69 per cent; the only losses were in Commerce, down 0.10 per cent.

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Eurozone bank bailout deal throws lifeline to Spain and Italy

Italy and Spain stunned Germany by blocking progress until they obtained softer bailout rules in 14 hours of bad-tempered talks

European leaders have pulled back from the brink of disastrous failure in their attempts to rescue the euro, throwing a lifeline to the weakest links in the eurozone by agreeing to shore up struggling banks directly, remove disadvantages for private creditors and move quickly towards a new eurozone supervisory regime for banks.

Amid bad-tempered talks that continued through the night, Italy and Spain stunned the Germans by blocking progress on an overall deal at a two-day EU summit in Brussels until they obtained guarantees that the eurozone would act to cut the soaring costs of their borrowing.

The tough negotiations were deadlocked for hours, prompting the departure from the summit after midnight of the 10 non-euro countries, including Britain, leaving the eurozone leaders to fight it out.

After 14 hours of wrangling, they emerged with a three-point statement rewriting the rules for the eurozone's new bailout regime in a way likely to soften the draconian terms that have accompanied the rescue programmes for Greece, Portugal, and Ireland over the past two years.

The leaders said a new eurozone banking supervisory system should be established by the end of the year. Once it is operational, the eurozone's new permanent bailout fund, the European Stability Mechanism, would be able to recapitalise failing banks directly, without the loans going via governments as at present and adding to national debt burdens. The shift had been demanded particularly by Mariano Rajoy, the prime minister of Spain.

The new supervisory system is likely to come under the authority of the European Central Bank. Under plans being mooted, the new banking regime is to entail pooling eurozone liability for guaranteeing savers' deposits and a common resolution fund for winding up bad banks. But the statement mentioned neither of these two points, which are controversial in Germany, which is reluctant to accept responsibility for the conduct of other countries.

The statement added that in drawing up the terms for up to €100bn (£80bn) for Spanish banks, private creditors would enjoy the same status as the bailout fund in the event of a debt rescheduling. Previously the fund enjoyed "seniority" over private investors.

Herman Van Rompuy, the European Council president who chaired the fractious summit, described the agreement as a breakthrough.

"We are opening possibilities for countries that are well-behaving to make use of financial stability instruments in order to reassure markets and get again some stability around some of the sovereign bonds of our member states," he said.

Eurozone finance ministers are to flesh out the details of the agreement in 10 days' time. It looked as though the shift towards direct help for struggling banks would help Spain but also lead to an improvement in Ireland's bailout terms. The deadlock imposed by Mario Monti, the Italian prime minister, and Rajoy had threatened to wreck ambitions for a "big leap forward" towards political union. The two leaders decided to block endorsement of an EU "growth pact" until it was clear whether the two-day summit would cough up financial aid.

Monti denied Italy intended to request a bailout. All the evidence pointed to a bad-tempered summit. There were also rows about the location of a new European patents court, with Germany, France and Britain at odds over where the institution should be based. With the fate of the currency said to be at stake as well as a radical new blueprint for a federalised eurozone on the table, Europe's leaders appeared bogged down on relatively minor issues.

They were more stridently at odds than ever before in the 30-month euro crisis, but with the stakes arguably at their highest since the currency and sovereign debt crisis erupted in Greece almost three years ago, the real substance of the summit was derailed, at least temporarily, by Italian and Spanish hardball tactics aimed at forcing Germany to soften its tough line on financial assistance to the weaker members of the eurozone.

Monti, who has been plaintively asking Germany to shift from its refusal to accept liability for others' debt, had been expected to deliver a plan late last night calling for help in reducing the cost of borrowing. Instead, he linked up with the Spanish to insist he would not sign off on the growth pact until the overall outcome of the summit became clear, witnesses said. The summit had been expected to quickly endorse the €120bn EU growth and jobs pact, more of a symbolic exercise in shifting the emphasis from austerity, involving little new money.

The tough Italian tactics paid off. The growth pact has been pushed mainly by France and it is the troubled economies of the eurozone, such as Italy and Spain, who are keenest to promote it in an attempt to turn the tide on the German emphasis on austerity and fiscal discipline.

Angela Merkel, the German chancellor, appeared to have little to lose by seeing the meeting blocked and a summit failure. President François Hollande of France sought to put a brave face on what might have turned out to be a debacle for him at his first big EU summit since he needed to take the growth pact home to prove he was already influencing European policy.

There is a risk the deal could yet unravel, though, as governments pick over the immense detail and complexity of establishing a new "banking union", putting the banks under a new eurozone supervisory authority. There will be arguments over how many banks should be covered, over pooled liability. The Germans insist there can be no common responsibility until the common rules are seen to be working properly.

Early on Friday morning, the leaders finally got down to the main topic of the summit, grappling with a "road map" for a 10-year march towards a eurozone political federation, embracing pooled banking, debt and fiscal policies and powers.

German officials maintained a tough line, insisting there were instruments available to help Italy and Spain, such as two eurozone bailout funds. But Italy would have to request aid and accept the same tough terms borne by others who had been rescued. Monti had used the runup to the summit to warn of disaster if his pleas went unheard, while Rajoy had declared that Madrid's borrowing costs were at the brink of what was affordable despite the benchmark 10-year yield falling below 7%.

It remains to be seen whether the steps agreed will be enough to deter market pressure and reverse rising borrowing costs for Spain and Italy. There will also be questions over whether the €740bn in the eurozone's two bailout funds will be enough to resolve a Spanish or Italian crisis.

After talks on Wednesday between Merkel and Hollande, it was clear from the remarks of German officials there was no meeting of minds; Paris and Berlin were seriously split at a summit for the first time in the crisis. "No sign of any warming between Berlin and Paris," said an EU official.


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Spain lifeline after EU allows direct access to eurozone bailout funds

EU leaders salvage summit in early hours as Angela Merkel appears to yield on tough reforms in exchange for rescue money

After a night of tough bargaining, European leaders have appeared to salvage what had seemed to be a summit teetering toward failure by agreeing early on Friday to funnel money directly to struggling banks, and in the longer term to form a tighter union.

The agreements at a European Union summit in Brussels suggested Germany had yielded on its insistence to force tough reforms in exchange for rescue money. It was a victory for Italy and Spain, who have argued they have done a lot to clean up their economies yet are facing rising borrowing costs.

Asian stock markets surged after European leaders agreed to the recapitalisation plan and a tighter union. Renewed concerns about Europe's debts have rattled investors worldwide amid fears they could threaten global economic recovery.

The bank decision in Brussels was aimed at helping Spain, which sought a €100bn (£80bn) rescue to help its troubled banks.

The European Council president, Herman Van Rompuy, called it a "breakthrough that banks can be recapitalised directly".

In addition, the leaders agreed that EU countries that were following budget rules could apply for bailouts that would not come with the stringent conditions that have accompanied previous EU bailouts – a recognition, said the Italian premier, Mario Monti, who pushed for the deal, of the work such countries were already doing in reforming their budgets.

Monti said Italy did not intend to apply for a bailout.

Still, Van Rompuy said the bailout agreement was important.

"We are opening the possibilities for countries that are well-behaving to make use of financial stability instruments, the EFSF and ESM, in order to reassure markets and get again some stability around some of the sovereign bonds of our member states," he said, referring to two bailout funds set up by the EU.

That meant, he said, there would be no more countries struggling under the stern conditions that have been imposed on previous EU countries that received bailouts an apparently sharp change in EU policy.

EU leaders agreed on Thursday night to devote €120bn in stimulus to encourage growth and create jobs. France had pushed for the growth package, arguing that austerity measures imposed to stem Europe's debt crisis were stifling growth and making it worse.

The German chancellor, Angela Merkel, said after the meetings broke up soon before dawn that she was "very satisfied that we took good decisions on growth".

Van Rompuy said leaders of the 17-nation eurozone also agreed to a joint banking supervisory body. And he said the leaders of the full 27-member European Union agreed to a general long-term plan for a tighter budgetary and political union.

The importance of recapitalising banks directly became evident when Spain asked for money for its shaky banks. Under current rules the bailout loan had to be made to the government, which would then lend it on to the banks. But having that debt on the government's books spooked investors, who began demanding higher interest rates for lending money to the government.

The result was rates that would have been unsustainable in the long term. Lending the money directly to the banks would avoid putting that debt on the government's books.

The leaders agreed on "the four building blocks" of a tighter European Union but said they would not start pinning down details until a report in October. The building blocks were laid out in a sweeping document presented by Van Rompuy and colleagues earlier this week that included sharing debt in the form of jointly issued eurobonds.

Van Rompuy said the report expected in October would be "a specific and time-bound roadmap for the achievement of a genuine economic and monetary union".

"The aim is to make the euro an irreversible project," he said.

He did not say on Friday, however, whether the general agreement on the tighter union included a firm commitment on eurobonds from Germany that has firmly opposed sharing debt with more profligate countries such as Greece.

Analysts said the proposals at the summit in Brussels represented credible steps forward in the region's efforts to contain a debt and financial crisis and to help struggling countries like Greece and Spain, whose economies are hobbled by recession and severe borrowing problems.

"Although the EU summit is still stuck on major issues including joint debt and euro bonds … the EU has laid out a long term plan in principle that can solve the problem if they can get all the leaders agreed on the details," said Jackson Wong, the vice-president at Tanrich Securities in Hong Kong.

"We don't expect a magical formula that can solve the problem right out from the EU summit. However, if we can see the stances from all the leaders, especially from Germany that they are heading to the right direction I think going forward, it should be OK."

The summit is set to finish up later on Friday.


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Greece's political crisis persists


CBC.ca

Greece's political crisis persists
Washington Post
eleven days ago, the apocalypse did not happen. The Greek elections took place, and the radicals did not win. Syriza — the neo-Marxist, anti-austerity party whose members call one another “comrade” and whose policies include the creation of 100000 new ...
IMF to visit Greece, Cyprus next weekReuters
'Patched-up' Greece pleads for more bailout timeCBC.ca
IMF open to negotiating terms of Greece's bailoutBusinessweek

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Euro talks stall over borrowing costs

Italy and Spain block endorsement of 'growth pact' unless measures are introduced to soften terms on financial assistance

European leaders were deadlocked early on Friday over ambitions to embark on a "big leap forward" towards political union and rescuing the euro, with Italy and Spain engaging in a risky gamble to hold an EU summit hostage unless measures were agreed to lower the soaring costs of their borrowing.

The summit struggled to agree on milder bailout formulas that would relieve the pressure of the financial markets on Spain and Italy, but Mario Monti and Mariano Rajoy, the Italian and Spanish prime ministers, decided to block endorsement of an EU "growth pact" until it was clear whether the two-day summit would cough up financial aid.

All the evidence pointed to a bad-tempered summit. There were also rows about the location of a new European patents court, with Germany, France and Britain at odds over where the institution should be based.

With the fate of the currency said to be at stake, as well as a radical new blueprint for a federalised eurozone on the table, Europe's leaders appeared bogged down on relatively minor issues.

Leaders were more stridently at odds than ever before in the 30-month euro crisis. But with the stakes arguably at their highest since the currency and sovereign debt crisis erupted in Greece almost three years ago, the real substance of the summit was derailed, at least temporarily, by the Italian and Spanish hardball tactics, which were aimed at forcing Germany to soften its line on financial assistance to the weaker members of the eurozone.

Monti, who has been plaintively asking Germany to budge from its refusal to accept liability for others' debt, had been expected to deliver a plan late calling for help in reducing the cost of borrowing. Instead, he linked up with the Spanish to insist that he would not sign off on the growth pact until the overall outcome of the summit became clear on Friday, witnesses said.

The summit had been expected to quickly endorse the €120bn (£962bn) EU growth and jobs pact, more of a symbolic exercise in shifting the emphasis from austerity, involving little new money.

It was not clear if the Italian tactic would succeed. The growth pact has been pushed mainly by France and it is the troubled economies of the eurozone, such as Italy and Spain, who are keenest to promote it to try to turn the tide on the German emphasis on austerity and fiscal discipline.

German chancellor Angela Merkel appeared to have little to lose by seeing the meeting blocked and a summit failure.

Early on Friday the leaders finally got down to the main topic of the summit, grappling with a "road map" for a 10-year march towards a eurozone political federation, embracing pooled banking, debt and fiscal policies and powers.

But the leaders were also attempting to come up with immediate steps to help Italy and Spain. The Italian and Spanish tactics suggested that attempts to agree on short-term measures to shore up their public finances were not going well.

German officials maintained a tough line, insisting that there were instruments available to help, such as two eurozone bailout funds. But Italy would have to request aid and accept the same tough terms borne by others who had been rescued.

Monti had used the runup to the summit to warn of disaster if his pleas went unheard, while Rajoy had declared that Madrid's borrowing costs were at the brink of what was affordable, despite the benchmark 10-year yield falling below 7%.

Various options were being canvassed to help Italy and Spain while observing the German penchant for sticking to the rules governing the bailout funds and the role of the European Central Bank (ECB).

One option, said to have been mooted by the Germans, was to use the temporary bailout fund – the European Financial Stability Facility – to absorb excessive Italian and Spanish borrowing costs. Italy would be guaranteed an interest rate of, say, 4%. If the markets charged Italy more, the bailout fund would soak up the difference.

There is only €240bn left in the EFSF, unlikely to be enough to deal with Italy and Spain. More arcane schemes using the fund as an insurance instrument were being mooted, while other ideas included using the bailout funds to buy up Italian or Spanish bonds, or having the ECB act similarly in the secondary markets – since the bank is not allowed to finance eurozone governments directly.

Arguments flared over issues of seniority in the bailouts, with Spain seeking changes to the terms so that private creditors would not be subordinate to the bailout fund in debt repayments.

Despite signs that the leaders were seeking a short-term fix while wrangling over the longer-term masterplan for a eurozone political union, the deadlock did not augur well for a breakthrough later on Friday.

EU leaders appeared more divided than ever.

After talks on Wednesday between Angela Merkel, Germany's chancellor, and François Hollande, the French president, it was clear from the remarks of German officials that there was no meeting of minds; Paris and Berlin were seriously split at a summit for the first time in the crisis. "No sign of any warming between Berlin and Paris," said an EU official.


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