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Monday, July 23, 2012

US Treasury's Collyns to travel to Athens, Rome


AFP

US Treasury's Collyns to travel to Athens, Rome
Reuters
| WASHINGTON (Reuters) - The United States will dispatch an envoy to Europe this week to discuss the economies of Greece and Italy with senior officials in Athens and Rome, the US Treasury said on Monday. Treasury's Assistant Secretary for ...
US Treasury official to visit Athens, Rome this weekAFP
Copper Settles 2% LowerWall Street Journal
Bill Clinton Pops Up in Greece as Europe's Woes WorsenBusinessweek
MarketWatch -Financial Times -Telegraph.co.uk
all 664 news articles »

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Spain struggles to fund itself


The Guardian

Spain struggles to fund itself
CNN
By Ben Rooney @CNNMoneyInvest July 23, 2012: 1:56 PM ET Spanish Prime Minister Mariano Rajoy and Minister of Economy Luis de Guindos at a meeting in Madrid earlier this month. NEW YORK (CNNMoney) -- Spain appears to have crossed a red line in the bond ...
Euro slumps on mounting Spanish and Greece concernsReuters
Euro Hits New Multiyear LowsWall Street Journal
Fears over Spain's financial crisis flare upWashington Post
The Associated Press -Businessweek
all 2,617 news articles »

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ITUC general secretary stresses dire straits of Greek workers

International Trade Union Confederation (ITUC) General Secretary Sharan Burrow presented the findings of an European survey conducted by the ITUC at a press conference held at the offices of the General Confederation of Employees of Greece (GSEE) in Athens.



Noting that 91 percent of Greek workers had seen their income reduced relative to previous years, with 7 percent remaining at the same level and only 3 percent having any sort of increase in (...)

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Bill Clinton Pops Up in Greece as Europe's Woes Worsen


CNBC.com

Bill Clinton Pops Up in Greece as Europe's Woes Worsen
Businessweek
Is Greece turning into a charity case? One could conclude as much from the visit to Greece this past weekend by former President Bill Clinton who has a habit of showing up in disaster zones and urging the rest of the world to provide help. The Greek ...
Germany sounds ready to kick Greece out of the euroWashington Post (blog)
Greece Seeks More Cuts as Deadlines LoomWall Street Journal
IMF says will support Greece in overcoming economic woesReuters
Lexington Herald Leader -MarketWatch -CNBC.com
all 411 news articles »

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Tsipras calls for government to end troika talks

Syriza chief Alexis Tsipras called on the government to end any discussion with the representatives of the EC-ECB-IMF troika, and propose an EU Summit meeting to focus on a different strategy for Greece.

Addressing the Syriza parliamentary group on Monday, Tsipras voiced his party’s determination to engage in dynamic action against privatisations and made a special reference to the case of ATEbank, calling it a “premeditated crime”.

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Is the EU ready to end Greece's bailout?

Lenders may be ready to cut their losses because Athens hasn't been able to cut its deficit enough



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Spain's borrowing rates hit record as crisis grows





The government predicts the economy will keep contracting into 2013 as new austerity measures — such as tax hikes and benefit cuts — hurt consumers and businesses.

The gloomy outlook has increased worries about public finances because shrinking economic output deprives the government of revenue it needs to lower the deficit.

If those borrowing rates do not fall back, the central government may end up being locked out of international markets and be forced to seek a financial rescue, like Greece, Ireland and Portugal.

A debt default by Spain would rock global financial markets and threaten the existence of the euro currency.

The ECB claims the measures are not effective in fighting the crisis and that governments need to take action by, among other things, sharing countries' debt loads.

The banks carry massive amounts of soured real estate investments following the collapse of the country's property bubble in 2008.

"There are situations of irrationality in the short term behavior of the markets, extreme nervousness which can't be resolved by governments and must be sorted out from other angles," he told reporters before going into Parliament to discuss the rescue package for the banks.


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Greece: Police in new clashes at steel plant


Greece: Police in new clashes at steel plant
Businessweek
ATHENS, Greece (AP) — Riot police have clashed with protesting steel workers outside a factory near Athens, in a labor dispute that has triggered a political spat in the crisis-hit country. Police said they used pepper spray and scuffled with ...


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Germany Expects Greek Troika Report Sep


Deutsche Welle

Germany Expects Greek Troika Report Sep
Wall Street Journal
By FRANZISKA SCHEVEN. Germany expects to receive a report on Greece from the debt-stricken country's international lenders in early September, a government spokesman said in a press conference on Monday in Berlin. The German government ...
Greece seeks billions of euros more in cuts: WSJMarketWatch
Troika of EC, ECB and IMF lenders likely to demand more Greek austerityThe Australian
Can Greece still be saved? 23.07.2012Deutsche Welle

all 12 news articles »

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Can Greece still be saved?

Greece's reform process is showing clear signs of lagging as the government requests more time to meet bailout conditions. International lenders are travelling to Greece this week for more talks and inspections.

READ THE ORIGINAL POST AT www.dw.de

'Greece II' opens in Spain


Examiner.com

'Greece II' opens in Spain
Examiner.com
As Greek Prime Minister Antonis Samaras declares the Greek economy to be in a 'Great Depression', Spain is now also spiraling down into social unrest akin to what occurred in Greece. Massive anti-austerity protests have erupted across Spain some ending ...

and more »

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Greece Seeks More Cuts as Deadlines Loom

Greece is seeking billions of euros of additional budget cuts and looks poised to announce the first steps toward streamlining its bloated public sector ahead of the return of a troika of international inspectors to Athens this week.

READ THE ORIGINAL POST AT online.wsj.com

Former US president Clinton calls for support to Greek economy

Former US President Bill Clinton, who paid a short visit to Athens on Sunday to address an event organized by Greek- American entrepreneurs, called for support to the ailing Greek economy.

READ THE ORIGINAL POST AT www.globaltimes.cn

Greece schools considering changes to Code of Conduct


Greece schools considering changes to Code of Conduct
Rochester Democrat and Chronicle
Students in the Greece Central School District could be allowed to use their cell phones, tablet computers and e-readers in certain areas of their schools, if the school board approves proposed changes to the mobile device policy. But, they won't be ...


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Greece Seeks Cuts Ahead of Troika Visit

Greece is seeking billions of euros of additional budget cuts and looks poised to announce the first steps toward streamlining its bloated public sector ahead of the return of a troika of international inspectors to Athens this week.

READ THE ORIGINAL POST AT online.wsj.com

Talk of Greece Exit From Euro Resurfaces


AFP

Talk of Greece Exit From Euro Resurfaces
Businessweek
Greece's troika of international creditors -- the European Commission, the European Central Bank and the International Monetary Fund -- will arrive in Athens tomorrow amid doubts the country will meet its commitments and reluctance among euro-area ...
Roesler questions if Greece can fulfil bailout conditionsBusiness Spectator
German Econ Min: Greece Likely Unable To Fulfill MoU CommitmentsNASDAQ
German vice chancellor says idea of Greek euro exit has 'lost its horror'Washington Post

all 139 news articles »

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Greece Back at Center of Euro Crisis as Exit Talk Resurfaces


Telegraph.co.uk

Greece Back at Center of Euro Crisis as Exit Talk Resurfaces
Bloomberg
Greece's troika of international creditors -- the European Commission, the European Central Bank and the International Monetary Fund -- will arrive in Athens tomorrow amid doubts the country will meet its commitments and reluctance among euro-area ...
Germany's Roesler Says 'Very Skeptical' Greece Can Be RescuedBusinessweek
Roesler questions if Greece can fulfil bailout conditionsBusiness Spectator
German Econ Min: Greece Likely Unable To Fulfill MoU CommitmentsNASDAQ
Washington Post
all 144 news articles »

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Markets fear for Spanish economy as local governments seek financial aid

ECB president insists the eurozone will not collapse as Murcia becomes latest region to request funding

Spain's regional woes are expected to weigh on financial markets this week after a second local government in three days asked for state aid, increasing fears that the eurozone's fourth largest economy will be forced to seek a full-blown rescue.

On Sunday Murcia became the latest region to admit it needed central government help, after European finance ministers waved through a €100bn (£77.8bn) recapitalisation of Spanish banks on Friday. Several other regions are expected to follow, with Catalonia reportedly unable to pay the interest on €48bn of borrowings.

Murcia's president, Ramón Luis Valcárcel, said he expected the south-eastern region to ask for up to €300m from Madrid as it struggled to refinance debt and cover its deficit.

"Don't imagine they are going to simply make a present of the money," he said, warning that Spain's prime minister, Mariano Rajoy, would impose strict conditions.

Murcia joins the far larger region of Valencia – which flagged up a cash shortage on Friday – on the list of regional governments that have said they will tap an €18bn liquidity fund set up by the central government just 10 days ago.

Several others among Spain's 17 semi-autonomous regions are expected to follow. They include the two biggest regions, Catalonia and Andalucia, as well as central Castilla La Mancha.

Valencia's announcement that it would seek money from the fund, which an increasingly desperate Spanish government has had to partially finance with a loan from the state-owned lottery company, helped send the country's sovereign bond yields soaring on Friday.

New government GDP projections also pushed up yields by forecasting that the Spanish economy would not grow before 2014. Ten-year bond yields rose to a new euro-era record of 7.25% on Friday, a rate widely seen as unsustainable and pushing the country closer to a bailout from the European Union and the International Monetary Fund.

Markets also reacted sharply to the news. On Friday, the Madrid stock market suffered its biggest one-day fall for two years, while markets in London, Paris and Frankfurt also slipped, with the FTSE 100 falling 1% to 5651.

The coming wave of regional bailouts may add further pressure to Spain's bond yields as they threaten to spiral out of control and drive Spain towards a full rescue.

Rajoy's ministers have urged the European Central Bank (ECB) to buy the country's bonds in order to relieve pressure, but ECB president Mario Draghi told Le Monde on Sunday that it had no plans to buy Spanish sovereign debt. He also insisted that the eurozone was "absolutely not" in danger of breaking up.

"We see analysts imagining the scenario of a eurozone blow-up. They don't recognise the political capital that our leaders have invested in this union and Europeans' support. The euro is irreversible," he told the French newspaper.

"All movement towards financial, budgetary and political union is, for me, inevitable and will lead to the creation of new supranational bodies."

Spain's regional bailouts come as senior figures in Catalonia and Murcia admit they will have trouble meeting the 1.5% deficit target they have been set this year by central government.

"There are reasons to doubt how we will be able to reduce the deficit from 4.4% to 1.5% this year," Valcárcel admitted.

Senior figures in Catalonia have also privately admitted that, although they are making every effort to meet the 1.5% target, the region will also struggle to make it. Strict regional deficit targets are a major part of Spain's strategy as it tries to meet the national deficit target it has been set by Brussels, which wants Spain's overall deficit down from last year's 8.9% of GDP to 6.3%.

Last year's high deficit was mainly due to regional governments which, despite demands from central government that they cut back, increased their joint overspend. They run health, education and social services – accounting for 37% of public spending.

Rajoy has introduced tough new laws and designed the liquidity fund in a way that allows it, if necessary, to take direct financial control of regions that fail to curb their deficits – imitating the control Brussels now exerts over southern European economies.

Artur Mas, the nationalist president of the independent-minded Catalonia region, has warned that full intervention would be unacceptable and has threatened to call regional elections if that happens.

"All regional governments run the risk of being intervened by central government, given that, if you do not meet the deficit target, the state will force you to take measures – that is intervention," Valcárcel explained.

Refinancing regional debt does not add to Spain's overall debt, but covering regional deficits does.

There were fresh protests at the weekend as several hundred demonstrators travelled to Madrid from many parts of Spain to protest over the country's near 25% unemployment rate, as well as the stinging austerity measures introduced by the government in a bid to avoid an international financial bailout. Protesters, many of whom were unemployed, carried banners saying "No cuts" and "United, that's enough".

As well as on Spain, markets' eyes will be on the Greek government and banks this week, analysts at Capital Economics note, following the news that the ECB will stop accepting Greek bonds as collateral for its refinancing operations pending a review by the troika.

"Greek banks can still use these bonds to access funds from the Greek National Bank's emergency liquidity assistance," said Jennifer McKeown at Capital Economics. "But such loans are more costly and this development will clearly add to the already intense pressure on the Greek banking system."

The Greek prime minister, Antonis Samaras, said on Sunday that Greece was now in a "Great Depression" similar to the American one in the 1930s. His comments, made to former US president Bill Clinton, who visited Greece as part of a delegation of Greek-American businessmen, came two days before a team of Greece's international lenders arrive in Athens to push for further austerity cuts.

Germany's economy minister, Philipp Rösler, questioned whether Greece could fulfill the conditions for receiving further international aid and said that the idea of the country leaving the euro had "lost its horror."


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